Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 28, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Kraft Heinz Co | |
Entity Central Index Key | 1,637,459 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,219,172,261 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 6,304 | $ 6,324 |
Cost of products sold | 4,059 | 4,125 |
Gross profit | 2,245 | 2,199 |
Selling, general and administrative expenses | 764 | 766 |
Operating income | 1,481 | 1,433 |
Interest expense | 317 | 313 |
Other expense/(income), net | (90) | (130) |
Income/(loss) before income taxes | 1,254 | 1,250 |
Provision for/(benefit from) income taxes | 261 | 359 |
Net income/(loss) | 993 | 891 |
Net income/(loss) attributable to noncontrolling interest | 0 | (2) |
Net income/(loss) attributable to common shareholders | $ 993 | $ 893 |
Per share data applicable to common shareholders: | ||
Basic earnings/(loss) per share (in dollars per share) | $ 0.81 | $ 0.73 |
Diluted earnings/(loss) per share (in dollars per share) | 0.81 | 0.73 |
Dividends declared (in dollars per share) | $ 0.625 | $ 0.60 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ 993 | $ 891 |
Other comprehensive income/(loss), net of tax: | ||
Foreign currency translation adjustments | 197 | 307 |
Net deferred gains/(losses) on net investment hedges | (74) | (51) |
Net deferred gains/(losses) on cash flow hedges | 22 | (34) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (13) | 20 |
Net actuarial gains/(losses) arising during the period | 0 | (10) |
Reclassification of net postemployment benefit losses/(gains) | (58) | (55) |
Total other comprehensive income/(loss) | 74 | 177 |
Total comprehensive income/(loss) | 1,067 | 1,068 |
Comprehensive income/(loss) attributable to noncontrolling interest | (5) | (4) |
Comprehensive income/(loss) attributable to common shareholders | $ 1,072 | $ 1,072 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 1,794 | $ 1,629 |
Trade receivables (net of allowances of $24 at March 31, 2018 and $23 at December 30, 2017) | 1,044 | 921 |
Sold receivables | 530 | 353 |
Income taxes receivable | 150 | 582 |
Inventories | 3,144 | 2,815 |
Other current assets | 775 | 966 |
Total current assets | 7,437 | 7,266 |
Property, plant and equipment, net | 7,267 | 7,120 |
Goodwill | 44,843 | 44,824 |
Intangible assets, net | 59,600 | 59,449 |
Other assets | 1,640 | 1,573 |
TOTAL ASSETS | 120,787 | 120,232 |
LIABILITIES AND EQUITY | ||
Commercial paper and other short-term debt | 1,001 | 460 |
Current portion of long-term debt | 2,742 | 2,743 |
Trade payables | 4,241 | 4,449 |
Accrued marketing | 567 | 680 |
Income taxes payable | 291 | 152 |
Interest payable | 345 | 419 |
Other current liabilities | 1,142 | 1,229 |
Total current liabilities | 10,329 | 10,132 |
Long-term debt | 28,561 | 28,333 |
Deferred income taxes | 14,085 | 14,076 |
Accrued postemployment costs | 400 | 427 |
Other liabilities | 949 | 1,017 |
TOTAL LIABILITIES | 54,324 | 53,985 |
Commitments and Contingencies (Note 14) | ||
Redeemable noncontrolling interest | 8 | 6 |
Equity: | ||
Common stock, $0.01 par value (5,000 shares authorized; 1,222 shares issued and 1,219 shares outstanding at March 31, 2018; 1,221 shares issued and 1,219 shares outstanding at December 30, 2017) | 12 | 12 |
Additional paid-in capital | 58,733 | 58,711 |
Retained earnings/(deficit) | 8,718 | 8,589 |
Accumulated other comprehensive income/(losses) | (975) | (1,054) |
Treasury stock, at cost (3 shares at March 31, 2018 and 2 shares at December 30, 2017) | (240) | (224) |
Total shareholders' equity | 66,248 | 66,034 |
Noncontrolling interest | 207 | 207 |
TOTAL EQUITY | 66,455 | 66,241 |
TOTAL LIABILITIES AND EQUITY | $ 120,787 | $ 120,232 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 23 | $ 23 |
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 issued | 1,222,000,000 | 1,221,000,000 |
Common stock, shares outstanding | 1,219,000,000 | 1,219,000,000 |
Treasury stock | 3,000,000 | 2,000,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity - 3 months ended Mar. 31, 2018 - 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. 30, 2017 | $ 66,241 | $ 12 | $ 58,711 | $ 8,589 | $ (1,054) | $ (224) | $ 207 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income/(loss) excluding redeemable noncontrolling interest | 998 | 993 | 5 | ||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest | 74 | 79 | (5) | ||||
Dividends declared-common stock | (762) | (762) | |||||
Cumulative effect of accounting standards adopted in the period | (95) | (95) | |||||
Exercise of stock options, issuance of other stock awards, and other | (1) | 22 | (7) | (16) | |||
Ending balance at Mar. 31, 2018 | $ 66,455 | $ 12 | $ 58,733 | $ 8,718 | $ (975) | $ (240) | $ 207 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 993 | $ 891 |
Adjustments to reconcile net income/(loss) to operating cash flows: | ||
Depreciation and amortization | 234 | 262 |
Amortization of postretirement benefit plans prior service costs/(credits) | (106) | (82) |
Equity award compensation expense | 7 | 11 |
Deferred income tax provision/(benefit) | (47) | 105 |
Pension contributions | (5) | (11) |
Nonmonetary currency devaluation | 47 | 8 |
Other items, net | (12) | 8 |
Changes in current assets and liabilities: | ||
Trade receivables | (712) | (1,040) |
Inventories | (312) | (492) |
Accounts payable | (69) | 62 |
Other current assets | 9 | (67) |
Other current liabilities | 386 | (270) |
Net cash provided by/(used for) operating activities | 413 | (615) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash receipts on sold receivables | 436 | 464 |
Capital expenditures | (223) | (368) |
Payments to acquire business, net of cash acquired | 215 | 0 |
Other investing activities, net | 6 | 38 |
Net cash provided by/(used for) investing activities | 4 | 134 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of commercial paper | 1,524 | 2,324 |
Repayments of commercial paper | (1,006) | (2,068) |
Dividends paid-common stock | (897) | (736) |
Other financing activities, net | 3 | (25) |
Net cash provided by/(used for) financing activities | (376) | (505) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (10) | 13 |
Cash, cash equivalents, and restricted cash | ||
Net increase/(decrease) | 31 | (973) |
Balance at beginning of period | 1,769 | 4,255 |
Balance at end of period | 1,800 | 3,282 |
Non-cash investing activities: | ||
Beneficial interest obtained in exchange for securitized trade receivables | $ 613 | $ 880 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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 fairly state our results for the periods presented. The condensed consolidated balance sheet data at December 30, 2017 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 30, 2017. The results for interim periods are not necessarily indicative of future or annual results. New Accounting Pronouncements Accounting Standards Adopted in the Current Year: In March 2017, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). This ASU became effective beginning in the first quarter of our fiscal year 2018. 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 is 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 service cost components. There is a practical expedient that allows us to use historical amounts disclosed in our Postemployment Benefits footnote as an estimation basis for retrospectively applying the statement of income presentation requirements. In the first quarter of 2018, we adopted this ASU using the practical expedient described above. The impact of retrospectively adopting this ASU on our historical statement of income is included in the table below. There was no associated impact to our condensed consolidated balance sheet at December 30, 2017 or our condensed consolidated statement of cash flows for the three months ended April 1, 2017 . In May 2014, the FASB issued ASU 2014-09, which superseded previously existing revenue recognition guidance. Under this ASU, companies must 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 to in exchange for those goods or services. 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. The ASU also provides for certain practical expedients, including the option to expense as incurred the incremental costs of obtaining a contract, if the contract period is for one year or less. This ASU was effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU in the first quarter of 2018 using the full retrospective method and the practical expedient described above. Upon adoption, we made the following policy elections: (i) we account for shipping and handling costs as contract fulfillment costs, and (ii) we exclude taxes imposed on and collected from customers in revenue producing transactions (e.g., sales, use, and value added taxes) from the transaction price. The impact of adopting this guidance was immaterial to our financial statements and related disclosures. While the impact of the adoption of ASU 2014-09 was immaterial, at the same time we retrospectively corrected immaterial misclassifications in our statements of income principally related to customer incentive program expenses. The impact on our statement of income for the three months ended April 1, 2017 was a decrease to net sales of $40 million , a decrease to cost of products sold of $38 million , and a decrease to selling, general and administrative expenses (“SG&A”) of $2 million . These impacts are included in the table below. There was no associated impact to our condensed consolidated balance sheet at December 30, 2017 or our condensed consolidated statement of cash flows for the three months ended April 1, 2017 . The impacts of these ASUs and reclassifications on our historical statement of income were as follows (in millions): For the Three Months Ended April 1, 2017 As Reported Adjustment As Adjusted Net sales $ 6,364 $ (40 ) $ 6,324 Cost of products sold 4,063 62 4,125 Gross profit 2,301 (102 ) 2,199 Selling, general and administrative expenses 750 16 766 Operating income 1,551 (118 ) 1,433 Other expense/(income), net (12 ) (118 ) (130 ) Income/(loss) before income taxes 1,250 — 1,250 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 party. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this new guidance on a modified retrospective basis through a cumulative-effect adjustment of $95 million to decrease retained earnings in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-01 clarifying the definition of a business used in determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU provides a screen for entities to determine if an integrated set of assets and activities (“set”) is not a business. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If this screen is not met, the entity then determines if the set meets the minimum requirement of a business. For a set to be a business, it must include an input and a substantive process which together significantly contribute to the ability to create outputs. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU on a prospective basis. The adoption of this ASU did not impact our financial statements or related disclosures. Accounting Standards Not Yet Adopted: In February 2016, the FASB issued ASU 2016-02 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 updated guidance requires lessees to reflect most leases on their balance sheets as assets and obligations. The ASU also provides for certain practical expedients, which we are considering for adoption. This includes ASU 2018-01, which provides a practical expedient that allows companies to exclude existing or expired land easements from the lease assessment (though new land easements entered into after adoption must be assessed). This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. The guidance must be adopted using a modified retrospective transition. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures. We have completed our scoping reviews, identified our significant leases by geography and by asset type, and made progress in developing accounting policies and policy elections upon adoption of the standard. We have also developed a lease data extraction strategy and commenced data extraction efforts. Furthermore, we have identified an accounting system to support the future state leasing process and have started to develop our future state process design as part of the overall system implementation. Upon adoption, we expect that our financial statement disclosures will be expanded to present additional details of our leasing arrangements. At this time, we are unable to reasonably estimate the expected increase in assets and liabilities on our condensed consolidated balance sheets upon adoption. We will adopt this ASU on the first day of our fiscal year 2019. 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 beginning 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 August 2017, the FASB issued ASU 2017-12 related to accounting for hedging activities. This guidance will impact the accounting for our financial (i.e., foreign exchange and interest rate) and non-financial (i.e., commodity) hedging activities. Key components of this ASU that could impact us are as follows: • Grants the ability to hedge the risk associated with the change in a contractually specified component of the purchase or sale of a non-financial item instead of the total contractual price, which could allow more commodity contracts to qualify for hedge accounting; • Requires us to defer the entire change in value of the derivative, including the effective and ineffective portion, into other comprehensive income until the hedged item impacts net income. When released, the deferred hedge gains and losses, including the ineffective portion, will be recognized in the same statement of income line affected by the hedged item; • Allows us to recognize changes in the fair value of excluded components in other comprehensive income (which will be amortized into net income over the life of the derivative) or in net income in the related period; • Changes hedge effectiveness testing, including timing and allowable methods of testing; and, • Requires additional tabular disclosures in the footnotes to the financial statements. The method for adopting the revised standard is modified retrospective. This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted, including in an interim period. We are currently evaluating the timing of adoption and the impact this ASU will have on our financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 related to reclassifying tax effects stranded in accumulated other comprehensive income because of the Tax Cuts and Jobs Act enacted on December 22, 2017 (“U.S. Tax Reform”). U.S. Tax Reform reduced the U.S. federal corporate tax rate from 35.0% to 21.0%. Accounting Standards Codification Topic 740, Income Taxes , (“ASC 740”) requires the remeasurement of deferred tax assets and liabilities as a result of such changes in tax laws or rates to be presented in net income from continuing operations. However, the related tax effects of such deferred tax assets and liabilities may have been originally recorded in other comprehensive income. This ASU allows companies to reclassify such stranded tax effects from accumulated other comprehensive income to retained earnings. This reclassification adjustment is optional, and if elected, may be applied either to the period of adoption or retrospectively to the period(s) impacted by U.S. Tax Reform. Additionally, this ASU requires companies to disclose the policy election for stranded tax effects as well as the general accounting policy for releasing income tax effects from accumulated other comprehensive income. This guidance is effective in the first quarter of 2019. Early adoption is permitted, including in an interim period. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures, including the timing of adoption and the application method. Significant Accounting Policies The following significant accounting policies were updated in the first quarter of 2018 to reflect changes upon adoption of ASU 2014-09 and ASU 2017-07. There were no other changes to our accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2017. Revenue Recognition: Our revenues are primarily derived from customer orders for the purchase of our products. We recognize revenues as performance obligations are fulfilled when control passes to our customers. We record revenues net of variable consideration including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). We also record a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. We base these estimates principally on historical and current period experience factors. We recognize costs paid to third party brokers to obtain contracts as expenses as our contracts are generally less than one year. Advertising, Consumer Incentives, and Trade Promotions: We promote our products with advertising, consumer incentives, and performance obligations related to trade promotions. Consumer incentives and trade promotions include, but are not limited to, discounts, coupons, rebates, performance based in-store display activities, and volume-based incentives. Variable consideration related to consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization, redemption rates, or current period experience factors. We review and adjust these estimates each quarter based on actual experience and other information. Postemployment Benefit Plans: We maintain various retirement plans for the majority of our employees. These include pension benefits, postretirement health care benefits, and defined contribution benefits. The cost of these plans is charged to expense over the working life of the covered employees. We generally amortize net actuarial gains or losses in future periods within other expense/(income), net. |
Acquisition (Notes)
Acquisition (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On March 9, 2018 (the “Acquisition Date”), we acquired all of the outstanding equity interests in Cerebos Pacific Limited (“Cerebos”) (the “Acquisition”), an Australian and New Zealand food and beverage company with several iconic local brands. The Cerebos business manufactures, markets, and sells food and beverage products, including gravies, sauces, instant coffee, salt, herbs and spices, and tea. We have elected to exclude the results of Cerebos from the Acquisition Date through March 31, 2018 from our condensed consolidated statement of income for the first quarter of 2018. These results were insignificant and we expect to record them in the second quarter of 2018. The preliminary opening balance sheet of Cerebos was included in our condensed consolidated balance sheet at March 31, 2018. We have not included unaudited pro forma results, prepared in accordance with ASC 805, as if Cerebos had been acquired as of January 1, 2018, as it would not yield materially different results. The Acquisition was accounted for under the acquisition method of accounting for business combinations. The total consideration paid for Cerebos was approximately $238 million . We utilized estimated fair values at the Acquisition Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed. The purchase price allocation for the Acquisition is preliminary and subject to adjustments. The fair value estimates of the assets acquired are subject to adjustment during the measurement period (up to one year from the Acquisition Date). The primary areas of accounting for the Acquisition that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired, residual goodwill, and any related tax impact. The fair values of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, we will evaluate any necessary information prior to finalization of the fair value. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the Acquisition Date, if any, that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings. The preliminary purchase price allocation to assets acquired and liabilities assumed in the Acquisition was (in millions): Cash $ 23 Other current assets 65 Property, plant and equipment, net 77 Identifiable intangible assets 100 Trade and other payables (40 ) Other non-current liabilities (4 ) Net assets acquired 221 Goodwill on acquisition 17 Total consideration $ 238 The Acquisition preliminarily resulted in $17 million of non tax deductible goodwill relating principally to planned expansion of Cerebos brands into new categories and markets. Goodwill has been allocated to our segments as shown in Note 6, Goodwill and Intangible Assets . The preliminary purchase price allocation to identifiable intangible assets acquired is: Fair Value (in millions of dollars) Weighted Average Life (in years) Definite-lived trademarks $ 87 22 Customer-related assets 13 12 Total $ 100 We valued trademarks using the relief from royalty method and customer-related assets using the distributor method. Some of the more significant assumptions inherent in developing the valuations included the estimated annual net cash flows for each definite-lived intangible asset (including net sales, cost of products sold, selling and marketing costs, and working capital/contributory asset charges), the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors. We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables. We used carrying values as of the Acquisition Date to value trade receivables and payables, as well as certain other current and non-current assets and liabilities, as we determined that they represented the fair value of those items at the Acquisition Date. We valued finished goods and work-in-process inventory using a net realizable value approach. Raw materials and packaging inventory was valued using the replacement cost approach. We valued property, plant and equipment using a combination of the income approach, the market approach and the cost approach, which is based on current replacement and/or reproduction cost of the asset as new, less depreciation attributable to physical, functional, and economic factors. We incurred merger costs of $9 million for the three months ended March 31, 2018 related to the Acquisition. |
Integration and Restructuring E
Integration and Restructuring Expenses (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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: In July 2015, 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. As of December 30, 2017, we had substantially completed our Integration Program. Approximately 60% of total Integration Program costs were reflected in cost of products sold and approximately 60% were cash expenditures. Overall, as part of the Integration Program, we closed net six factories, consolidated our distribution network, and eliminated 4,900 positions. The Integration Program liability at March 31, 2018 related primarily to lease terminations in the U.S. and Canada. As of March 31, 2018 , we have incurred cumulative costs of $2,113 million , including $58 million for the three months ended March 31, 2018 and $127 million for the three months ended April 1, 2017 . The $2,113 million of cumulative costs included $539 million of severance and employee benefit costs, $878 million of non-cash asset-related costs, $588 million of other implementation costs, and $108 million of other exit costs. The related amounts incurred during the three months ended March 31, 2018 were $20 million of non-cash asset-related costs and $38 million of other implementation costs. We expect to incur additional Integration Program costs of approximately $30 million , primarily in the second quarter of 2018. Our liability balance for Integration Program costs that qualify as exit and disposal costs under U.S. GAAP (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 30, 2017 $ 24 $ 22 $ 46 Cash payments (5 ) (1 ) (6 ) Non-cash utilization (9 ) — (9 ) Balance at March 31, 2018 $ 10 $ 21 $ 31 (a) Other exit costs primarily consist of lease and contract terminations. We expect the liability for severance and employee benefit costs as of March 31, 2018 to be paid by 2019. The liability for other exit costs primarily relates to lease obligations. The cash impact of these obligations will continue for the duration of the lease terms, which expire between 2019 and 2026. 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. Related to these programs, we expect to eliminate approximately 700 positions, 70 of whom left the Company in the first quarter of 2018. These programs resulted in expenses of $32 million during the three months ended March 31, 2018 , including $21 million of severance and employee benefit costs and $11 million of other implementation costs. Other restructuring program expenses totaled $21 million for the three months ended April 1, 2017 . Our liability balance for restructuring project costs that qualify as exit and disposal costs under U.S. GAAP (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 30, 2017 $ 16 $ 25 $ 41 Charges/(credits) 21 — 21 Cash payments (6 ) (1 ) (7 ) Non-cash utilization 9 — 9 Balance at March 31, 2018 $ 40 $ 24 $ 64 (a) Other exit costs primarily consist of lease and contract terminations. We expect a substantial portion of the liability for severance and employee benefit costs as of March 31, 2018 to be paid in 2018. The liability for other exit costs primarily relates to lease obligations. The cash impact of these obligations will continue for the duration of the lease terms, which expire between 2018 and 2026. Total Integration and Restructuring: Total expenses related to the Integration Program and restructuring activities, by income statement caption, were (in millions): March 31, April 1, Severance and employee benefit costs - COGS $ 16 $ 12 Severance and employee benefit costs - SG&A 5 19 Severance and employee benefit costs - Other expense/(income), net — 13 Asset-related costs - COGS 20 75 Asset-related costs - SG&A — 7 Other costs - COGS 40 9 Other costs - SG&A 9 13 $ 90 $ 148 We do not include Integration Program and restructuring expenses within Segment Adjusted EBITDA (as defined in Note 16, Segment Reporting ). The pre-tax impact of allocating such expenses to our segments would have been (in millions): March 31, April 1, United States $ 52 $ 108 Canada 3 10 EMEA 21 14 Rest of World — — General corporate expenses 14 16 $ 90 $ 148 In the first quarter of 2018, we reorganized our segment structure to move our Middle East and Africa businesses from the Rest of World segment to the Europe, Middle East, and Africa (“EMEA”) reportable segment. We have reflected this change in all historical periods presented. This change did not have a material impact on our current or any prior period results. See Note 16, Segment Reporting , for additional information. |
Restricted Cash (Notes)
Restricted Cash (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, December 30, 2017 Cash and cash equivalents $ 1,794 $ 1,629 Restricted cash included in other assets (current) 6 140 Cash, cash equivalents, and restricted cash $ 1,800 $ 1,769 |
Inventories (Notes)
Inventories (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): March 31, 2018 December 30, 2017 Packaging and ingredients $ 588 $ 560 Work in process 478 439 Finished product 2,078 1,816 Inventories $ 3,144 $ 2,815 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill: Changes in the carrying amount of goodwill, by segment, were (in millions): United States Canada EMEA Rest of World Total Balance at December 30, 2017 $ 33,700 $ 5,246 $ 3,238 $ 2,640 $ 44,824 Translation adjustments — (128 ) 107 23 2 Acquisition — — — 17 17 Balance at March 31, 2018 $ 33,700 $ 5,118 $ 3,345 $ 2,680 $ 44,843 In the first quarter of 2018, we reorganized our segment structure to move our Middle East and Africa businesses from the Rest of World segment to the EMEA reportable segment. We have reflected this change in all historical periods presented. Accordingly, the segment goodwill balances at December 30, 2017 reflect an increase of $179 million in EMEA and a corresponding decrease in Rest of World. This change did not have a material impact on our current or any prior period results. See Note 16, Segment Reporting , for additional information. See Note 2, Acquisition , for additional information related to our acquisition of Cerebos. We test goodwill for impairment at least annually in the second quarter or when a triggering event occurs. We performed our 2017 annual impairment test as of April 2, 2017. As a result of our 2017 annual impairment test, there was no impairment of goodwill. Each of our goodwill reporting units had excess fair value over its carrying value of at least 10% as of April 2, 2017. Our goodwill balance consists of 20 reporting units and had an aggregate carrying value of $44.8 billion as of March 31, 2018 . As a majority of our goodwill was recently recorded in connection with business combinations that occurred in 2015 and 2013, representing fair values as of the respective transaction dates, there was not a significant excess of fair values over carrying values as of April 2, 2017. 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 March 31, 2018 that indicated it was more likely than not that our goodwill was impaired. There were no accumulated impairment losses to goodwill as of March 31, 2018 . Indefinite-lived intangible assets: Changes in the carrying amount of indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at December 30, 2017 $ 53,655 Translation adjustments 102 Balance at March 31, 2018 $ 53,757 We test indefinite-lived intangible assets for impairment at least annually in the second quarter or when a triggering event occurs. We performed our 2017 annual impairment test as of April 2, 2017. As a result of our 2017 annual impairment test, we recognized a non-cash impairment loss of $49 million in SG&A in the second quarter of 2017. This loss was due to continued declines in nutritional beverages in India. The loss was recorded in our EMEA segment as the related trademark is owned by our Italian subsidiary. Each of our other brands had excess fair value over its carrying value of at least 10% as of April 2, 2017. Our indefinite-lived intangible assets primarily consist of a large number of individual brands and had an aggregate carrying value of $53.8 billion as of March 31, 2018 . As a majority of our indefinite-lived intangible assets were recently recorded in connection with business combinations that occurred in 2015 and 2013, representing fair values as of the respective transaction dates, there was not a significant excess of fair values over carrying values as of April 2, 2017. 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 March 31, 2018 that indicated it was more likely than not that our indefinite-lived intangible assets were impaired. Definite-lived intangible assets: Definite-lived intangible assets were (in millions): March 31, 2018 December 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,478 $ (317 ) $ 2,161 $ 2,386 $ (288 ) $ 2,098 Customer-related assets 4,254 (588 ) 3,666 4,231 (544 ) 3,687 Other 21 (5 ) 16 14 (5 ) 9 $ 6,753 $ (910 ) $ 5,843 $ 6,631 $ (837 ) $ 5,794 Amortization expense for definite-lived intangible assets was $70 million for the three months ended March 31, 2018 and $67 million for the three months ended April 1, 2017 . Additionally, we recorded $87 million of trademarks and $13 million of customer-related assets as part of the Cerebos acquisition. Aside from amortization expense and purchase accounting adjustments, the changes in definite-lived intangible assets from December 30, 2017 to March 31, 2018 primarily reflect the impact of foreign currency. We estimate that amortization expense related to definite-lived intangible assets will be approximately $275 million for each of the next five years. |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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 20.8% for the three months ended March 31, 2018 compared to 28.7% for the three months ended April 1, 2017 . The decrease in our effective tax rate was mostly driven by the favorable impact of U.S. Tax Reform, primarily related to the lower federal corporate tax rate. This favorability was partially offset by tax associated with certain provisions of U.S. Tax Reform such as the federal tax on GILTI (defined below) . Additionally, in the prior year we had favorability from net discrete items, primarily related to reversals of uncertain tax position reserves in foreign jurisdictions. U.S. Tax Reform legislation enacted by the federal government on December 22, 2017 significantly changed U.S. tax law by, among other things, lowering the federal corporate tax rate from 35.0% to 21.0% , effective January 1, 2018, and imposing a one-time toll charge on deemed repatriated earnings of foreign subsidiaries as of December 30, 2017. In addition, there were many new provisions, including changes to bonus depreciation, the deduction for executive compensation and interest expense, a tax on global intangible low-taxed income provisions (“GILTI”), the base erosion anti-abuse tax (“BEAT”), and a deduction for foreign-derived intangible income (“FDII”). Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the SEC in December 2017 provides us with up to one year to finalize accounting for the impacts of U.S. Tax Reform. When the initial accounting for U.S Tax Reform impacts is incomplete, we may include provisional amounts when reasonable estimates can be made. As of December 30, 2017, we had made reasonable estimates of our deferred income tax benefit related to the corporate rate change, the toll charge, and other tax expenses, including a change in our indefinite reinvestment assertion related to historic earnings of foreign subsidiaries as of December 30, 2017. In the first quarter of 2018, we recorded a measurement period adjustment to reduce income tax expense and reduce deferred tax liabilities each by approximately $20 million . We did not record any other measurement period adjustments to our provisional U.S. Tax Reform amounts during the three months ended March 31, 2018. The ultimate impacts of U.S. Tax Reform may differ from our provisional amounts due to gathering additional information to more precisely compute the amount of tax, changes in interpretations and assumptions, additional regulatory guidance that may be issued, and actions we may take. We expect to revise our U.S. Tax Reform impact estimates as we refine our analysis of the new rules and as new guidance is issued. We expect to finalize accounting for the impacts of U.S. Tax Reform when the 2017 U.S. corporate income tax return is filed in 2018. We have undistributed historic earnings in foreign subsidiaries which are currently not considered to be indefinitely reinvested. We have recorded a reasonable estimate of deferred taxes of $96 million as of March 31, 2018 to reflect local country withholding taxes that will be owed when this cash is distributed in the future. Additionally, as of March 31, 2018, we consider the unremitted current year earnings of certain international subsidiaries that impose local country taxes on dividends to be indefinitely reinvested. For those undistributed earnings considered to be indefinitely reinvested, our intent is to reinvest these funds in our international operations and our current plans do not demonstrate a need to repatriate the accumulated earnings to fund our U.S. cash requirements. See Note 8, Income Taxes , to our consolidated financial statements for the year ended December 30, 2017 in our Annual Report on Form 10-K for additional information related to U.S. Tax Reform impacts. |
Employees' Stock Incentive Plan
Employees' Stock Incentive Plans (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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 2018. Other off-cycle equity grants and vesting 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 30, 2017 19,289,564 $ 41.63 Granted 1,420,250 66.89 Forfeited (408,067 ) 44.45 Exercised (476,048 ) 32.19 Outstanding at March 31, 2018 19,825,699 43.61 The aggregate intrinsic value of stock options exercised during the period was $20 million for the three months ended March 31, 2018 . 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 30, 2017 1,284,262 $ 81.91 Granted 1,352,251 58.78 Forfeited (49,633 ) 86.85 Vested (113,671 ) 73.12 Outstanding at March 31, 2018 2,473,209 69.57 The aggregate fair value of RSUs that vested during the period was $8 million for the three months ended March 31, 2018 . Performance Share Units: Our performance share unit (“PSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) Outstanding at December 30, 2017 815,383 $ 70.16 Granted 2,595,333 56.82 Forfeited (32,812 ) 69.02 Outstanding at March 31, 2018 3,377,904 59.92 |
Postemployment Benefits (Notes)
Postemployment Benefits (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Postemployment Benefits | Postemployment Benefits We capitalize a portion of net pension and postretirement cost/(benefit) into inventory based on our production activities. The amounts capitalized into inventory as of March 31, 2018 and April 1, 2017 are included in the net pension and postretirement cost/(benefit) tables below. Beginning January 1, 2018, only the service cost component of net pension and postretirement cost/(benefit) is capitalized into inventory. As part of the adoption of ASU 2017-07, we recognized a one-time favorable credit of $42 million within cost of products sold related to amounts that were previously capitalized into inventory. Included in this credit was $28 million related to prior service credits that were previously capitalized to inventory. 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 March 31, April 1, March 31, April 1, Service cost $ 2 $ 3 $ 5 $ 4 Interest cost 39 45 19 16 Expected return on plan assets (63 ) (65 ) (48 ) (43 ) Amortization of unrecognized losses/(gains) — — 1 — Special/contractual termination benefits — 7 1 6 Other — 2 — (9 ) Net pension cost/(benefit) $ (22 ) $ (8 ) $ (22 ) $ (26 ) We present all non-service cost components of net pension cost/(benefit) within other expense/(income), net on our condensed consolidated statements of income. Employer Contributions: During the three months ended March 31, 2018 , we contributed $5 million to our non-U.S. pension plans. We did no t contribute to our U.S. pension plans. Based on our contribution strategy, we plan to make further contributions of approximately $50 million to our non-U.S. pension plans during the remainder of 2018. We do no t plan to make contributions to our U.S. pension plans in 2018. However, our actual contributions and plans may change due to many factors, including the timing of regulatory approval for the windup of certain non-U.S. pension plans, changes in tax, employee benefit, or other laws and regulations, 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 March 31, April 1, Service cost $ 2 $ 2 Interest cost 11 13 Expected return on plan assets (12 ) — Amortization of prior service costs/(credits) (78 ) (90 ) Net postretirement cost/(benefit) $ (77 ) $ (75 ) We present all non-service cost components of net postretirement cost/(benefit) within other expense/(income), net on our condensed consolidated statements of income. Employer Contributions: During the three months ended March 31, 2018 , we contributed $17 million to our postretirement benefit plans. Based on our contribution strategy, we plan to make further contributions of approximately $10 million to our postretirement benefit plans during the remainder of 2018. However, our actual contributions and plans may change due to many factors, including changes in tax, employee benefit, or other laws and regulations, tax deductibility, significant differences between expected and actual postretirement plan asset performance or interest rates, or other factors. |
Financial Instruments (Notes)
Financial Instruments (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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 30, 2017 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 outstanding derivative instruments were (in millions): March 31, 2018 December 30, 2017 Commodity contracts $ 389 $ 272 Foreign exchange contracts 3,447 2,876 Cross-currency contracts 3,161 3,161 Fair Value of Derivative Instruments: The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the condensed consolidated balance sheets were (in millions): March 31, 2018 Quoted Prices in Active Markets for Identical Assets and Liabilities 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 $ — $ — $ 12 $ 28 $ — $ — $ 12 $ 28 Cross-currency contracts — — 329 — — — 329 — Derivatives not designated as hedging instruments: Commodity contracts 6 11 — — — — 6 11 Foreign exchange contracts — — 14 5 — — 14 5 Cross-currency contracts — — 18 — — — 18 — Total fair value $ 6 $ 11 $ 373 $ 33 $ — $ — $ 379 $ 44 December 30, 2017 Quoted Prices in Active Markets for Identical Assets and Liabilities (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 $ — $ — $ 8 $ 42 $ — $ — $ 8 $ 42 Cross-currency contracts — — 344 — — — 344 — Derivatives not designated as hedging instruments: Commodity contracts 4 8 — — — — 4 8 Foreign exchange contracts — — 17 3 — — 17 3 Cross-currency contracts — — 19 — — — 19 — Total fair value $ 4 $ 8 $ 388 $ 45 $ — $ — $ 392 $ 53 Our derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. We elect to record the gross assets and liabilities of our derivative financial instruments on the condensed consolidated balance sheets. If the derivative financial instruments had been netted on the condensed consolidated balance sheets, the asset and liability positions each would have been reduced by $30 million at March 31, 2018 and $23 million at December 30, 2017 . No material amounts of collateral were received or posted on our derivative assets and liabilities at March 31, 2018 . 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 swaps, foreign exchange forwards and swaps, and cross-currency swaps. Commodity swaps 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 and swaps 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 derivative assets 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 March 31, 2018 , the principal amounts of foreign denominated debt designated as net investment hedges totaled €2,550 million and £400 million . At March 31, 2018 , 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 exchange contracts that are designated as net investment hedges. At March 31, 2018 , we had Chinese renminbi foreign exchange contracts with an aggregate USD notional amount of $221 million . Hedge Coverage: At March 31, 2018 , 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 21 months; and • cross-currency contracts for periods not exceeding the next 21 months. At March 31, 2018 , 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 nine months; and • foreign exchange contracts for periods not exceeding the next 11 months. • cross-currency contracts for periods not exceeding the next 19 months. 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 March 31, 2018 and assuming market rates remain constant through contract maturities, we expect transfers to net income/(loss) of unrealized losses 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 condensed consolidated statements of income and statements of comprehensive income: March 31, April 1, 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/(loss) (effective portion) $ — $ 25 $ — $ — $ — $ (39 ) $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income/(loss) (effective portion) — (11 ) (11 ) — — (4 ) (30 ) — Total gains/(losses) recognized in other comprehensive income/(loss) (effective portion) $ — $ 14 $ (11 ) $ — $ — $ (43 ) $ (30 ) $ — Cash flow hedges reclassified to net income/(loss): Cost of products sold (effective portion) $ — $ (5 ) $ — $ — $ — $ (1 ) $ — $ — Other expense/(income), net — 18 — — — (15 ) — — Interest expense — — — (1 ) — — — (1 ) — 13 — (1 ) — (16 ) — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (5 ) — — — (37 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — 20 (1 ) — — 2 (1 ) — (5 ) 20 (1 ) — (37 ) 2 (1 ) — Total gains/(losses) recognized in statements of income $ (5 ) $ 33 $ (1 ) $ (1 ) $ (37 ) $ (14 ) $ (1 ) $ (1 ) Related to our non-derivative, foreign denominated debt instruments designated as net investment hedges, we recognized pre-tax losses of $103 million for the three months ended March 31, 2018 and $44 million for the three months ended April 1, 2017 . These amounts were recognized in other comprehensive income/(loss) for the periods then ended. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Losses) (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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 30, 2017 $ (1,587 ) $ 549 $ (16 ) $ (1,054 ) Foreign currency translation adjustments 202 — — 202 Net deferred gains/(losses) on net investment hedges (74 ) — — (74 ) Net deferred gains/(losses) on cash flow hedges — — 22 22 Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (13 ) (13 ) Reclassification of net postemployment benefit losses/(gains) — (58 ) — (58 ) Total other comprehensive income/(loss) 128 (58 ) 9 79 Balance as of March 31, 2018 $ (1,459 ) $ 491 $ (7 ) $ (975 ) 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 March 31, April 1, Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ 202 $ — $ 202 $ 309 $ — $ 309 Net deferred gains/(losses) on net investment hedges (125 ) 51 (74 ) (78 ) 27 (51 ) Net deferred gains/(losses) on cash flow hedges 25 (3 ) 22 (39 ) 5 (34 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income (12 ) (1 ) (13 ) 17 3 20 Net actuarial gains/(losses) arising during the period — — — (12 ) 2 (10 ) Reclassification of net postemployment benefit losses/(gains) (77 ) 19 (58 ) (90 ) 35 (55 ) 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 March 31, April 1, Losses/(gains) on cash flow hedges: Foreign exchange contracts $ 5 $ 1 Cost of products sold Foreign exchange contracts (18 ) 15 Other expense/(income), net Interest rate contracts 1 1 Interest expense Losses/(gains) on cash flow hedges before income taxes (12 ) 17 Losses/(gains) on cash flow hedges, income taxes (1 ) 3 Losses/(gains) on cash flow hedges $ (13 ) $ 20 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ 1 $ — (a) Amortization of prior service costs/(credits) (78 ) (90 ) (a) Losses/(gains) on postemployment benefits before income taxes (77 ) (90 ) Losses/(gains) on postemployment benefits, income taxes 19 35 Losses/(gains) on postemployment benefits $ (58 ) $ (55 ) (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 9, 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. |
Venezuela - Foreign Currency an
Venezuela - Foreign Currency and Inflation (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Foreign Currency [Abstract] | |
Venezuela - Foreign Currency and Inflation | Venezuela - Foreign Currency and Inflation We have a subsidiary in Venezuela that manufactures and sells a variety of products, primarily in the condiments and sauces and infant and nutrition categories. We apply highly inflationary accounting to the results of our Venezuelan subsidiary and include these results in our consolidated financial statements. Under highly inflationary accounting, the functional currency of our Venezuelan subsidiary is the U.S. dollar (the reporting currency of Kraft Heinz), although the majority of its transactions are in Venezuelan bolivars. As a result, we must revalue the results of our Venezuelan subsidiary to U.S. dollars. We revalue the income statement using daily weighted average DICOM rates, and we revalue the bolivar denominated monetary assets and liabilities at the period-end DICOM spot rate. The resulting revaluation gains and losses are recorded in current net income, rather than accumulated other comprehensive income. These gains and losses are classified within other expense/(income), net as nonmonetary currency devaluation on our condensed consolidated statements of income. In February 2018, the Venezuelan government eliminated the official exchange rate of BsF 10 per U.S. dollar, which was available through the Sistema de Divisa Protegida (“DIPRO”) for purchases and sales of essential items, including food products. At December 30, 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 DIPRO rate until March 10, 2016). Following the elimination of this preferential rate, we determined that these outstanding requests, which were approved by the Venezuelan government, were no longer collectible. There was no impact on our condensed consolidated statement of income for the three months ended March 31, 2018 . Following elimination of the DIPRO rate, the Sistema de Divisa Complementaria (“DICOM”) is the only foreign currency exchange mechanism legally available to us for converting Venezuelan bolivars to U.S. dollars. The auction-based DICOM system was temporarily frozen in September 2017 but reopened in February 2018. The last published DICOM rate before the auction freeze was BsF 3,345 per U.S. dollar compared to BsF 25,000 per U.S. dollar upon reopening in February 2018. The DICOM rate at March 31, 2018 was BsF 49,478 per U.S. dollar. We did not obtain any U.S. dollars at DICOM rates during the three months ended March 31, 2018. As of March 31, 2018, we believe the DICOM rate is the most appropriate legally available rate at which to translate the results of our Venezuelan subsidiary. We continue to monitor the DICOM rate, and the nonmonetary assets supported by the underlying operations in Venezuela, for impairment. We remeasured the bolivar denominated assets and liabilities of our Venezuelan subsidiary at March 31, 2018 using the DICOM spot rate of BsF 49,478 per U.S. dollar. We remeasured the income statement of our Venezuelan subsidiary for the three months ended March 31, 2018 using a weighted average rate of BsF 18,081 per U.S. dollar. Remeasurements of the monetary assets and liabilities and operating results of our Venezuelan subsidiary at DICOM rates resulted in nonmonetary currency devaluation losses of $47 million for the three months ended March 31, 2018 and $8 million for the three months ended April 1, 2017. These losses were recorded in other expense/(income), net in the condensed consolidated statements of income for the periods then ended. In addition to DICOM, there is an unofficial market for obtaining U.S. dollars with Venezuelan bolivars. The exact exchange rate is widely debated but is generally accepted to be substantially higher than the latest published DICOM rate. We have not transacted at any unofficial market rates in 2018 and have no plans to transact at unofficial market rates in the foreseeable future. Outside of accessing the DICOM market, our Venezuelan subsidiary obtains U.S. dollars through exports and royalty payments. These U.S. dollars are primarily used for purchases of tomato paste and spare parts for manufacturing, as well as a limited amount of other operating costs. As of March 31, 2018 , our Venezuelan subsidiary has sufficient U.S. dollars to fund these operational needs in the foreseeable future. However, further deterioration of the economic environment or regulation changes could jeopardize our export business. Our Venezuelan subsidiary has increasingly sourced production inputs locally, including tomato paste and sugar, in order to reduce reliance on U.S. dollars, which we expect to continue in the foreseeable future. Our results of operations in Venezuela reflect a controlled subsidiary. We continue to have sufficient currency liquidity and pricing flexibility to control 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. We currently do not expect to make any new investments or contributions into Venezuela. |
Financing Arrangements (Notes)
Financing Arrangements (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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) are classified as investing activities and presented as cash receipts on sold receivables on our condensed consolidated statements of cash flows. At March 31, 2018 , we had accounts receivable securitization and factoring programs in place in the U.S. and in various countries across the globe. Generally, each of these programs automatically renews annually until terminated by either party, except our U.S. securitization program, which expires in May 2018. Additionally, our U.S. securitization program utilizes a bankruptcy-remote special-purpose entity (“SPE”). The SPE is wholly-owned by a subsidiary of Kraft Heinz and its sole business consists of the purchase or acceptance, through capital contributions of receivables and related assets, from a Kraft Heinz subsidiary and subsequent transfer of such receivables and related assets to a bank. Although the SPE is included in our condensed consolidated financial statements, it is a separate legal entity with separate creditors who will be entitled, upon its liquidation, to be satisfied out of the SPE's assets prior to any assets or value in the SPE becoming available to Kraft Heinz or its subsidiaries. The carrying value of trade receivables removed from our condensed consolidated balance sheets in connection with the Programs was $1.2 billion at March 31, 2018 and $1.0 billion at December 30, 2017 . In exchange for the sale of trade receivables, we received cash of $659 million at March 31, 2018 and $673 million at December 30, 2017 and recorded sold receivables of $530 million at March 31, 2018 and $353 million at December 30, 2017 . The carrying value of sold receivables approximated the fair value at March 31, 2018 and December 30, 2017 . We act as servicer for certain of the Programs and did not record any related servicing assets or liabilities as of March 31, 2018 or December 30, 2017 because they were not material to the financial statements. Additionally, we enter into various structured payable arrangements to facilitate supply from our vendors. Balance sheet classification is based on the nature of the agreements with our various vendors. For certain arrangements, we classify amounts outstanding within other current liabilities on our condensed consolidated balance sheets. We had approximately $141 million on our condensed consolidated balance sheets at March 31, 2018 and approximately $188 million at December 30, 2017 related to these arrangements. |
Commitments, Contingencies and
Commitments, Contingencies and Debt (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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. 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. Redeemable Noncontrolling Interest In 2017, we commenced operations of a joint venture with a minority partner to manufacture, package, market, and distribute refrigerated soups and meal sides. We control operations and include this business in our consolidated results. Our minority partner has put options that, if it chooses to exercise them, would require us to purchase portions of its equity interest at a future date. These put options will become exercisable beginning in 2025 (on the eighth anniversary of the product launch date) at a price to be determined at that time based upon an independent third party valuation. The minority partner’s put options are reflected on our condensed consolidated balance sheets as a redeemable noncontrolling interest. We accrete the redeemable noncontrolling interest to its estimated redemption value over the term of the put options. At March 31, 2018 , we estimate the redemption value to be approximately $100 million . Debt Borrowing Arrangements: We had commercial paper outstanding of $965 million at March 31, 2018 and $448 million at December 30, 2017. See Note 16, Debt , to our consolidated financial statements for the year ended December 30, 2017 in our Annual Report on Form 10-K for additional information on our borrowing arrangements. Fair Value of Debt: At March 31, 2018 , the aggregate fair value of our total debt was $32.6 billion as compared with a carrying value of $32.3 billion . At December 30, 2017 , the aggregate fair value of our total debt was $33.0 billion as compared with a carrying value of $31.5 billion . We determined the fair value of our long-term debt using Level 2 inputs. Fair values are generally estimated based on quoted market prices for identical or similar instruments. |
Earnings Per Share (Notes)
Earnings Per Share (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Our earnings per common share (“EPS”) were: For the Three Months Ended March 31, April 1, (in millions, except per share data) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 993 $ 893 Weighted average shares of common stock outstanding 1,219 1,217 Net earnings/(loss) $ 0.81 $ 0.73 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 993 $ 893 Weighted average shares of common stock outstanding 1,219 1,217 Effect of dilutive equity awards 9 12 Weighted average shares of common stock outstanding, including dilutive effect 1,228 1,229 Net earnings/(loss) $ 0.81 $ 0.73 We use the treasury stock method to calculate the dilutive effect of outstanding equity awards in the denominator for diluted EPS. Anti-dilutive shares were 5 million for the three months ended March 31, 2018 and 1 million for the three months ended April 1, 2017 . |
Segment Reporting (Notes)
Segment Reporting (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
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. In the first quarter of our fiscal year 2018, we reorganized certain of our international businesses to better align our global geographies. As a result, we moved our Middle East and Africa businesses from the historical Asia Pacific, Middle East, and Africa (“AMEA”) operating segment into the historical Europe reportable segment, forming the new EMEA reportable segment. The remaining businesses from the AMEA operating segment became the Asia Pacific (“APAC”) operating segment. We have reflected this change in all historical periods presented. Therefore, effective in the first quarter of 2018, we manage and report our operating results through four segments. We have three reportable segments defined by geographic region: United States, Canada, and EMEA. Our remaining businesses are combined and disclosed as “Rest of World”. Rest of World is comprised of two operating segments: Latin America and APAC. Management evaluates segment performance based on several factors, including net sales and Segment Adjusted EBITDA. Segment Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), net, provision for/(benefit from) income taxes, and depreciation and amortization (excluding integration and restructuring expenses); in addition to these adjustments, we exclude, when they occur, the impacts of integration and restructuring expenses, 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, nonmonetary currency devaluation (e.g., remeasurement gains and losses), and equity award compensation expense (excluding integration and restructuring expenses). Segment Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. Management uses Segment Adjusted EBITDA to evaluate segment performance and allocate resources. 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 March 31, April 1, Net sales: United States $ 4,368 $ 4,518 Canada 484 440 EMEA 685 597 Rest of World 767 769 Total net sales $ 6,304 $ 6,324 Segment Adjusted EBITDA was (in millions): For the Three Months Ended March 31, April 1, Segment Adjusted EBITDA: United States $ 1,382 $ 1,464 Canada 134 125 EMEA 182 140 Rest of World 143 144 General corporate expenses (46 ) (29 ) Depreciation and amortization (excluding integration and restructuring expenses) (206 ) (222 ) Integration and restructuring expenses (90 ) (135 ) Merger costs (9 ) — Unrealized gains/(losses) on commodity hedges (2 ) (42 ) Equity award compensation expense (excluding integration and restructuring expenses) (7 ) (12 ) Operating income 1,481 1,433 Interest expense 317 313 Other expense/(income), net (90 ) (130 ) Income/(loss) before income taxes $ 1,254 $ 1,250 In the first quarter of 2018, 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. Net sales by product category were (in millions): For the Three Months Ended March 31, April 1, Condiments and sauces $ 1,625 $ 1,536 Cheese and dairy 1,251 1,292 Ambient meals 634 607 Frozen and chilled meals 604 648 Meats and seafood 608 657 Refreshment beverages 375 369 Coffee 357 349 Infant and nutrition 199 188 Desserts, toppings and baking 193 194 Nuts and salted snacks 190 231 Other 268 253 Total net sales $ 6,304 $ 6,324 |
Supplemental Financial Informat
Supplemental Financial Information (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information We fully and unconditionally guarantee the notes issued by our 100% owned operating subsidiary, Kraft Heinz Foods Company. See Note 16, Debt, to our consolidated financial statements for the year ended December 30, 2017 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 Securities and Exchange Commission 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 March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,169 $ 2,262 $ (127 ) $ 6,304 Cost of products sold — 2,588 1,598 (127 ) 4,059 Gross profit — 1,581 664 — 2,245 Selling, general and administrative expenses — 183 581 — 764 Intercompany service fees and other recharges — 1,155 (1,155 ) — — Operating income — 243 1,238 — 1,481 Interest expense — 298 19 — 317 Other expense/(income), net — (159 ) 69 — (90 ) Income/(loss) before income taxes — 104 1,150 — 1,254 Provision for/(benefit from) income taxes — (27 ) 288 — 261 Equity in earnings of subsidiaries 993 862 — (1,855 ) — Net income/(loss) 993 993 862 (1,855 ) 993 Net income/(loss) attributable to noncontrolling interest — — — — — Net income/(loss) excluding noncontrolling interest $ 993 $ 993 $ 862 $ (1,855 ) $ 993 Comprehensive income/(loss) excluding noncontrolling interest $ 1,072 $ 1,072 $ 1,165 $ (2,237 ) $ 1,072 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 $ — $ 4,329 $ 2,157 $ (162 ) $ 6,324 Cost of products sold — 2,762 1,525 (162 ) 4,125 Gross profit — 1,567 632 — 2,199 Selling, general and administrative expenses — 196 570 — 766 Intercompany service fees and other recharges — 1,108 (1,108 ) — — Operating income — 263 1,170 — 1,433 Interest expense — 303 10 — 313 Other expense/(income), net — (74 ) (56 ) — (130 ) 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 Balance Sheets As of March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 647 $ 1,147 $ — $ 1,794 Trade receivables — 88 956 — 1,044 Receivables due from affiliates — 743 215 (958 ) — Dividends due from affiliates — — — — — Sold receivables — — 530 — 530 Income taxes receivable — 1,452 156 (1,458 ) 150 Inventories — 2,035 1,109 — 3,144 Short-term lending due from affiliates — 1,704 3,673 (5,377 ) — Other current assets — 354 429 (8 ) 775 Total current assets — 7,023 8,215 (7,801 ) 7,437 Property, plant and equipment, net — 4,601 2,666 — 7,267 Goodwill — 11,067 33,776 — 44,843 Investments in subsidiaries 66,248 80,678 — (146,926 ) — Intangible assets, net — 3,187 56,413 — 59,600 Long-term lending due from affiliates — 1,700 2,031 (3,731 ) — Other assets — 491 1,149 — 1,640 TOTAL ASSETS $ 66,248 $ 108,747 $ 104,250 $ (158,458 ) $ 120,787 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 965 $ 36 $ — $ 1,001 Current portion of long-term debt — 2,579 163 — 2,742 Short-term lending due to affiliates — 3,673 1,704 (5,377 ) — Trade payables — 2,575 1,666 — 4,241 Payables due to affiliates — 215 743 (958 ) — Accrued marketing — 142 425 — 567 Income taxes payable — 6 1,743 (1,458 ) 291 Interest payable — 339 6 — 345 Dividends due to affiliates — — — — — Other current liabilities — 451 699 (8 ) 1,142 Total current liabilities — 10,945 7,185 (7,801 ) 10,329 Long-term debt — 27,616 945 — 28,561 Long-term borrowings due to affiliates — 2,031 2,073 (4,104 ) — Deferred income taxes — 1,147 12,938 — 14,085 Accrued postemployment costs — 167 233 — 400 Other liabilities — 593 356 — 949 TOTAL LIABILITIES — 42,499 23,730 (11,905 ) 54,324 Redeemable noncontrolling interest — — 8 — 8 Total shareholders’ equity 66,248 66,248 80,305 (146,553 ) 66,248 Noncontrolling interest — — 207 — 207 TOTAL EQUITY 66,248 66,248 80,512 (146,553 ) 66,455 TOTAL LIABILITIES AND EQUITY $ 66,248 $ 108,747 $ 104,250 $ (158,458 ) $ 120,787 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of December 30, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 509 $ 1,120 $ — $ 1,629 Trade receivables — 91 830 — 921 Receivables due from affiliates — 716 207 (923 ) — Dividends due from affiliates 135 — — (135 ) — Sold receivables — — 353 — 353 Income taxes receivable — 1,904 97 (1,419 ) 582 Inventories — 1,846 969 — 2,815 Short-term lending due from affiliates — 1,598 3,816 (5,414 ) — Other current assets — 493 473 — 966 Total current assets 135 7,157 7,865 (7,891 ) 7,266 Property, plant and equipment, net — 4,577 2,543 — 7,120 Goodwill — 11,067 33,757 — 44,824 Investments in subsidiaries 66,034 80,426 — (146,460 ) — Intangible assets, net — 3,222 56,227 — 59,449 Long-term lending due from affiliates — 1,700 2,029 (3,729 ) — Other assets — 515 1,058 — 1,573 TOTAL ASSETS $ 66,169 $ 108,664 $ 103,479 $ (158,080 ) $ 120,232 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 448 $ 12 $ — $ 460 Current portion of long-term debt — 2,577 166 — 2,743 Short-term lending due to affiliates — 3,816 1,598 (5,414 ) — Trade payables — 2,718 1,731 — 4,449 Payables due to affiliates — 207 716 (923 ) — Accrued marketing — 236 444 — 680 Income taxes payable — — 1,571 (1,419 ) 152 Interest payable — 404 15 — 419 Dividends due to affiliates — 135 — (135 ) — Other current liabilities 135 473 621 — 1,229 Total current liabilities 135 11,014 6,874 (7,891 ) 10,132 Long-term debt — 27,442 891 — 28,333 Long-term borrowings due to affiliates — 2,029 1,919 (3,948 ) — Deferred income taxes — 1,245 12,831 — 14,076 Accrued postemployment costs — 184 243 — 427 Other liabilities — 716 301 — 1,017 TOTAL LIABILITIES 135 42,630 23,059 (11,839 ) 53,985 Redeemable noncontrolling interest — — 6 — 6 Total shareholders’ equity 66,034 66,034 80,207 (146,241 ) 66,034 Noncontrolling interest — — 207 — 207 TOTAL EQUITY 66,034 66,034 80,414 (146,241 ) 66,241 TOTAL LIABILITIES AND EQUITY $ 66,169 $ 108,664 $ 103,479 $ (158,080 ) $ 120,232 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 897 $ 447 $ (34 ) $ (897 ) $ 413 CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 436 — 436 Capital expenditures — (101 ) (122 ) — (223 ) Payments to acquire business, net of cash acquired — (236 ) 21 — (215 ) Net proceeds from/(payments on) intercompany lending activities — 469 183 (652 ) — Additional investments in subsidiaries — (5 ) — 5 — Return of capital 6 — — (6 ) — Other investing activities, net — 6 — — 6 Net cash provided by/(used for) investing activities 6 133 518 (653 ) 4 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of commercial paper — 1,524 — — 1,524 Repayments of commercial paper — (1,006 ) — — (1,006 ) Net proceeds from/(payments on) intercompany borrowing activities — (183 ) (469 ) 652 — Dividends paid-common stock (897 ) (897 ) — 897 (897 ) Other intercompany capital stock transactions — (6 ) 5 1 — Other financing activities, net (6 ) (9 ) 18 — 3 Net cash provided by/(used for) financing activities (903 ) (577 ) (446 ) 1,550 (376 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — (10 ) — (10 ) Cash, cash equivalents, and restricted cash: Net increase/(decrease) — 3 28 — 31 Balance at beginning of period — 644 1,125 — 1,769 Balance at end of period $ — $ 647 $ 1,153 $ — $ 1,800 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 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 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): March 31, 2018 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 647 $ 1,147 $ — $ 1,794 Restricted cash included in other assets (current) — — 6 — 6 Cash, cash equivalents, and restricted cash $ — $ 647 $ 1,153 $ — $ 1,800 December 30, 2017 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 509 $ 1,120 $ — $ 1,629 Restricted cash included in other assets (current) — 135 5 — 140 Cash, cash equivalents, and restricted cash $ — $ 644 $ 1,125 $ — $ 1,769 |
Background and Basis of Prese25
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Policy | 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 fairly state our results for the periods presented. The condensed consolidated balance sheet data at December 30, 2017 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 30, 2017. The results for interim periods are not necessarily indicative of future or annual results. |
New Accounting Pronouncements, Policy | New Accounting Pronouncements Accounting Standards Adopted in the Current Year: In March 2017, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). This ASU became effective beginning in the first quarter of our fiscal year 2018. 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 is 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 service cost components. There is a practical expedient that allows us to use historical amounts disclosed in our Postemployment Benefits footnote as an estimation basis for retrospectively applying the statement of income presentation requirements. In the first quarter of 2018, we adopted this ASU using the practical expedient described above. The impact of retrospectively adopting this ASU on our historical statement of income is included in the table below. There was no associated impact to our condensed consolidated balance sheet at December 30, 2017 or our condensed consolidated statement of cash flows for the three months ended April 1, 2017 . In May 2014, the FASB issued ASU 2014-09, which superseded previously existing revenue recognition guidance. Under this ASU, companies must 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 to in exchange for those goods or services. 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. The ASU also provides for certain practical expedients, including the option to expense as incurred the incremental costs of obtaining a contract, if the contract period is for one year or less. This ASU was effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU in the first quarter of 2018 using the full retrospective method and the practical expedient described above. Upon adoption, we made the following policy elections: (i) we account for shipping and handling costs as contract fulfillment costs, and (ii) we exclude taxes imposed on and collected from customers in revenue producing transactions (e.g., sales, use, and value added taxes) from the transaction price. The impact of adopting this guidance was immaterial to our financial statements and related disclosures. While the impact of the adoption of ASU 2014-09 was immaterial, at the same time we retrospectively corrected immaterial misclassifications in our statements of income principally related to customer incentive program expenses. The impact on our statement of income for the three months ended April 1, 2017 was a decrease to net sales of $40 million , a decrease to cost of products sold of $38 million , and a decrease to selling, general and administrative expenses (“SG&A”) of $2 million . These impacts are included in the table below. There was no associated impact to our condensed consolidated balance sheet at December 30, 2017 or our condensed consolidated statement of cash flows for the three months ended April 1, 2017 . The impacts of these ASUs and reclassifications on our historical statement of income were as follows (in millions): For the Three Months Ended April 1, 2017 As Reported Adjustment As Adjusted Net sales $ 6,364 $ (40 ) $ 6,324 Cost of products sold 4,063 62 4,125 Gross profit 2,301 (102 ) 2,199 Selling, general and administrative expenses 750 16 766 Operating income 1,551 (118 ) 1,433 Other expense/(income), net (12 ) (118 ) (130 ) Income/(loss) before income taxes 1,250 — 1,250 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 party. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this new guidance on a modified retrospective basis through a cumulative-effect adjustment of $95 million to decrease retained earnings in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-01 clarifying the definition of a business used in determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU provides a screen for entities to determine if an integrated set of assets and activities (“set”) is not a business. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If this screen is not met, the entity then determines if the set meets the minimum requirement of a business. For a set to be a business, it must include an input and a substantive process which together significantly contribute to the ability to create outputs. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU on a prospective basis. The adoption of this ASU did not impact our financial statements or related disclosures. Accounting Standards Not Yet Adopted: In February 2016, the FASB issued ASU 2016-02 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 updated guidance requires lessees to reflect most leases on their balance sheets as assets and obligations. The ASU also provides for certain practical expedients, which we are considering for adoption. This includes ASU 2018-01, which provides a practical expedient that allows companies to exclude existing or expired land easements from the lease assessment (though new land easements entered into after adoption must be assessed). This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. The guidance must be adopted using a modified retrospective transition. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures. We have completed our scoping reviews, identified our significant leases by geography and by asset type, and made progress in developing accounting policies and policy elections upon adoption of the standard. We have also developed a lease data extraction strategy and commenced data extraction efforts. Furthermore, we have identified an accounting system to support the future state leasing process and have started to develop our future state process design as part of the overall system implementation. Upon adoption, we expect that our financial statement disclosures will be expanded to present additional details of our leasing arrangements. At this time, we are unable to reasonably estimate the expected increase in assets and liabilities on our condensed consolidated balance sheets upon adoption. We will adopt this ASU on the first day of our fiscal year 2019. 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 beginning 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 August 2017, the FASB issued ASU 2017-12 related to accounting for hedging activities. This guidance will impact the accounting for our financial (i.e., foreign exchange and interest rate) and non-financial (i.e., commodity) hedging activities. Key components of this ASU that could impact us are as follows: • Grants the ability to hedge the risk associated with the change in a contractually specified component of the purchase or sale of a non-financial item instead of the total contractual price, which could allow more commodity contracts to qualify for hedge accounting; • Requires us to defer the entire change in value of the derivative, including the effective and ineffective portion, into other comprehensive income until the hedged item impacts net income. When released, the deferred hedge gains and losses, including the ineffective portion, will be recognized in the same statement of income line affected by the hedged item; • Allows us to recognize changes in the fair value of excluded components in other comprehensive income (which will be amortized into net income over the life of the derivative) or in net income in the related period; • Changes hedge effectiveness testing, including timing and allowable methods of testing; and, • Requires additional tabular disclosures in the footnotes to the financial statements. The method for adopting the revised standard is modified retrospective. This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted, including in an interim period. We are currently evaluating the timing of adoption and the impact this ASU will have on our financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 related to reclassifying tax effects stranded in accumulated other comprehensive income because of the Tax Cuts and Jobs Act enacted on December 22, 2017 (“U.S. Tax Reform”). U.S. Tax Reform reduced the U.S. federal corporate tax rate from 35.0% to 21.0%. Accounting Standards Codification Topic 740, Income Taxes , (“ASC 740”) requires the remeasurement of deferred tax assets and liabilities as a result of such changes in tax laws or rates to be presented in net income from continuing operations. However, the related tax effects of such deferred tax assets and liabilities may have been originally recorded in other comprehensive income. This ASU allows companies to reclassify such stranded tax effects from accumulated other comprehensive income to retained earnings. This reclassification adjustment is optional, and if elected, may be applied either to the period of adoption or retrospectively to the period(s) impacted by U.S. Tax Reform. Additionally, this ASU requires companies to disclose the policy election for stranded tax effects as well as the general accounting policy for releasing income tax effects from accumulated other comprehensive income. This guidance is effective in the first quarter of 2019. Early adoption is permitted, including in an interim period. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures, including the timing of adoption and the application method. |
Revenue Recognition, Policy | Revenue Recognition: Our revenues are primarily derived from customer orders for the purchase of our products. We recognize revenues as performance obligations are fulfilled when control passes to our customers. We record revenues net of variable consideration including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). We also record a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. We base these estimates principally on historical and current period experience factors. We recognize costs paid to third party brokers to obtain contracts as expenses as our contracts are generally less than one year. |
Advertising Costs, Policy | Advertising, Consumer Incentives, and Trade Promotions: We promote our products with advertising, consumer incentives, and performance obligations related to trade promotions. Consumer incentives and trade promotions include, but are not limited to, discounts, coupons, rebates, performance based in-store display activities, and volume-based incentives. Variable consideration related to consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization, redemption rates, or current period experience factors. We review and adjust these estimates each quarter based on actual experience and other information. |
Postemployment Benefit Plans, Policy | Postemployment Benefit Plans: We maintain various retirement plans for the majority of our employees. These include pension benefits, postretirement health care benefits, and defined contribution benefits. The cost of these plans is charged to expense over the working life of the covered employees. We generally amortize net actuarial gains or losses in future periods within other expense/(income), net. |
Background and Basis of Prese26
Background and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impacts of Adopting ASUs and Reclassifications on Historical Statement of Income | The impacts of these ASUs and reclassifications on our historical statement of income were as follows (in millions): For the Three Months Ended April 1, 2017 As Reported Adjustment As Adjusted Net sales $ 6,364 $ (40 ) $ 6,324 Cost of products sold 4,063 62 4,125 Gross profit 2,301 (102 ) 2,199 Selling, general and administrative expenses 750 16 766 Operating income 1,551 (118 ) 1,433 Other expense/(income), net (12 ) (118 ) (130 ) Income/(loss) before income taxes 1,250 — 1,250 |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation to Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation to assets acquired and liabilities assumed in the Acquisition was (in millions): Cash $ 23 Other current assets 65 Property, plant and equipment, net 77 Identifiable intangible assets 100 Trade and other payables (40 ) Other non-current liabilities (4 ) Net assets acquired 221 Goodwill on acquisition 17 Total consideration $ 238 |
Preliminary Purchase Price Allocation to Identifiable Intangible Assets Acquired | The preliminary purchase price allocation to identifiable intangible assets acquired is: Fair Value (in millions of dollars) Weighted Average Life (in years) Definite-lived trademarks $ 87 22 Customer-related assets 13 12 Total $ 100 |
Integration and Restructuring28
Integration and Restructuring Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Costs by Type and Income Statement Location | Total expenses related to the Integration Program and restructuring activities, by income statement caption, were (in millions): March 31, April 1, Severance and employee benefit costs - COGS $ 16 $ 12 Severance and employee benefit costs - SG&A 5 19 Severance and employee benefit costs - Other expense/(income), net — 13 Asset-related costs - COGS 20 75 Asset-related costs - SG&A — 7 Other costs - COGS 40 9 Other costs - SG&A 9 13 $ 90 $ 148 |
Restructuring Costs Excluded from Segments | The pre-tax impact of allocating such expenses to our segments would have been (in millions): March 31, April 1, United States $ 52 $ 108 Canada 3 10 EMEA 21 14 Rest of World — — General corporate expenses 14 16 $ 90 $ 148 |
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 exit and disposal costs under U.S. GAAP (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 30, 2017 $ 24 $ 22 $ 46 Cash payments (5 ) (1 ) (6 ) Non-cash utilization (9 ) — (9 ) Balance at March 31, 2018 $ 10 $ 21 $ 31 (a) Other exit costs primarily consist of lease and contract 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 exit and disposal costs under U.S. GAAP (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 30, 2017 $ 16 $ 25 $ 41 Charges/(credits) 21 — 21 Cash payments (6 ) (1 ) (7 ) Non-cash utilization 9 — 9 Balance at March 31, 2018 $ 40 $ 24 $ 64 (a) Other exit costs primarily consist of lease and contract terminations. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, December 30, 2017 Cash and cash equivalents $ 1,794 $ 1,629 Restricted cash included in other assets (current) 6 140 Cash, cash equivalents, and restricted cash $ 1,800 $ 1,769 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): March 31, 2018 December 30, 2017 Packaging and ingredients $ 588 $ 560 Work in process 478 439 Finished product 2,078 1,816 Inventories $ 3,144 $ 2,815 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill, by segment, were (in millions): United States Canada EMEA Rest of World Total Balance at December 30, 2017 $ 33,700 $ 5,246 $ 3,238 $ 2,640 $ 44,824 Translation adjustments — (128 ) 107 23 2 Acquisition — — — 17 17 Balance at March 31, 2018 $ 33,700 $ 5,118 $ 3,345 $ 2,680 $ 44,843 |
Changes in the Carrying Amount of Indefinite-Lived Intangible Assets | Changes in the carrying amount of indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at December 30, 2017 $ 53,655 Translation adjustments 102 Balance at March 31, 2018 $ 53,757 |
Schedule of Definite-Lived Intangible Assets By Major Asset Class | Definite-lived intangible assets were (in millions): March 31, 2018 December 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,478 $ (317 ) $ 2,161 $ 2,386 $ (288 ) $ 2,098 Customer-related assets 4,254 (588 ) 3,666 4,231 (544 ) 3,687 Other 21 (5 ) 16 14 (5 ) 9 $ 6,753 $ (910 ) $ 5,843 $ 6,631 $ (837 ) $ 5,794 |
Employees' Stock Incentive Pl32
Employees' Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity and Related Information | Our stock option activity and related information was: Number of Stock Options Weighted Average Exercise Price Outstanding at December 30, 2017 19,289,564 $ 41.63 Granted 1,420,250 66.89 Forfeited (408,067 ) 44.45 Exercised (476,048 ) 32.19 Outstanding at March 31, 2018 19,825,699 43.61 |
Schedule of RSU Activity and Related Information | Our restricted stock unit (“RSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) Outstanding at December 30, 2017 1,284,262 $ 81.91 Granted 1,352,251 58.78 Forfeited (49,633 ) 86.85 Vested (113,671 ) 73.12 Outstanding at March 31, 2018 2,473,209 69.57 |
Schedule of PSU Activity and Related Information | Our performance share unit (“PSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) Outstanding at December 30, 2017 815,383 $ 70.16 Granted 2,595,333 56.82 Forfeited (32,812 ) 69.02 Outstanding at March 31, 2018 3,377,904 59.92 |
Postemployment Benefits (Tables
Postemployment Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
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 March 31, April 1, March 31, April 1, Service cost $ 2 $ 3 $ 5 $ 4 Interest cost 39 45 19 16 Expected return on plan assets (63 ) (65 ) (48 ) (43 ) Amortization of unrecognized losses/(gains) — — 1 — Special/contractual termination benefits — 7 1 6 Other — 2 — (9 ) Net pension cost/(benefit) $ (22 ) $ (8 ) $ (22 ) $ (26 ) |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net Cost/(Benefit) | Net postretirement cost/(benefit) consisted of the following (in millions): For the Three Months Ended March 31, April 1, Service cost $ 2 $ 2 Interest cost 11 13 Expected return on plan assets (12 ) — Amortization of prior service costs/(credits) (78 ) (90 ) Net postretirement cost/(benefit) $ (77 ) $ (75 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Values of Outstanding Derivatives | The notional values of our outstanding derivative instruments were (in millions): March 31, 2018 December 30, 2017 Commodity contracts $ 389 $ 272 Foreign exchange contracts 3,447 2,876 Cross-currency contracts 3,161 3,161 |
Schedule of Derivative Fair Values | The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the condensed consolidated balance sheets were (in millions): March 31, 2018 Quoted Prices in Active Markets for Identical Assets and Liabilities 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 $ — $ — $ 12 $ 28 $ — $ — $ 12 $ 28 Cross-currency contracts — — 329 — — — 329 — Derivatives not designated as hedging instruments: Commodity contracts 6 11 — — — — 6 11 Foreign exchange contracts — — 14 5 — — 14 5 Cross-currency contracts — — 18 — — — 18 — Total fair value $ 6 $ 11 $ 373 $ 33 $ — $ — $ 379 $ 44 December 30, 2017 Quoted Prices in Active Markets for Identical Assets and Liabilities (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 $ — $ — $ 8 $ 42 $ — $ — $ 8 $ 42 Cross-currency contracts — — 344 — — — 344 — Derivatives not designated as hedging instruments: Commodity contracts 4 8 — — — — 4 8 Foreign exchange contracts — — 17 3 — — 17 3 Cross-currency contracts — — 19 — — — 19 — Total fair value $ 4 $ 8 $ 388 $ 45 $ — $ — $ 392 $ 53 |
Schedule of Cross-Currency Swaps Designated as Net Investment Hedges | At March 31, 2018 , 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 Statements of Income and Comprehensive Income | The following tables present the pre-tax effect of derivative instruments on the condensed consolidated statements of income and statements of comprehensive income: March 31, April 1, 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/(loss) (effective portion) $ — $ 25 $ — $ — $ — $ (39 ) $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income/(loss) (effective portion) — (11 ) (11 ) — — (4 ) (30 ) — Total gains/(losses) recognized in other comprehensive income/(loss) (effective portion) $ — $ 14 $ (11 ) $ — $ — $ (43 ) $ (30 ) $ — Cash flow hedges reclassified to net income/(loss): Cost of products sold (effective portion) $ — $ (5 ) $ — $ — $ — $ (1 ) $ — $ — Other expense/(income), net — 18 — — — (15 ) — — Interest expense — — — (1 ) — — — (1 ) — 13 — (1 ) — (16 ) — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (5 ) — — — (37 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — 20 (1 ) — — 2 (1 ) — (5 ) 20 (1 ) — (37 ) 2 (1 ) — Total gains/(losses) recognized in statements of income $ (5 ) $ 33 $ (1 ) $ (1 ) $ (37 ) $ (14 ) $ (1 ) $ (1 ) |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Income/(Losses) (Tables) - AOCI Attributable to Parent | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income/(Loss) [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 30, 2017 $ (1,587 ) $ 549 $ (16 ) $ (1,054 ) Foreign currency translation adjustments 202 — — 202 Net deferred gains/(losses) on net investment hedges (74 ) — — (74 ) Net deferred gains/(losses) on cash flow hedges — — 22 22 Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (13 ) (13 ) Reclassification of net postemployment benefit losses/(gains) — (58 ) — (58 ) Total other comprehensive income/(loss) 128 (58 ) 9 79 Balance as of March 31, 2018 $ (1,459 ) $ 491 $ (7 ) $ (975 ) |
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 March 31, April 1, Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ 202 $ — $ 202 $ 309 $ — $ 309 Net deferred gains/(losses) on net investment hedges (125 ) 51 (74 ) (78 ) 27 (51 ) Net deferred gains/(losses) on cash flow hedges 25 (3 ) 22 (39 ) 5 (34 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income (12 ) (1 ) (13 ) 17 3 20 Net actuarial gains/(losses) arising during the period — — — (12 ) 2 (10 ) Reclassification of net postemployment benefit losses/(gains) (77 ) 19 (58 ) (90 ) 35 (55 ) |
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 March 31, April 1, Losses/(gains) on cash flow hedges: Foreign exchange contracts $ 5 $ 1 Cost of products sold Foreign exchange contracts (18 ) 15 Other expense/(income), net Interest rate contracts 1 1 Interest expense Losses/(gains) on cash flow hedges before income taxes (12 ) 17 Losses/(gains) on cash flow hedges, income taxes (1 ) 3 Losses/(gains) on cash flow hedges $ (13 ) $ 20 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ 1 $ — (a) Amortization of prior service costs/(credits) (78 ) (90 ) (a) Losses/(gains) on postemployment benefits before income taxes (77 ) (90 ) Losses/(gains) on postemployment benefits, income taxes 19 35 Losses/(gains) on postemployment benefits $ (58 ) $ (55 ) (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 9, Postemployment Benefits , for additional information. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Common Share, Basic and Diluted | Our earnings per common share (“EPS”) were: For the Three Months Ended March 31, April 1, (in millions, except per share data) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 993 $ 893 Weighted average shares of common stock outstanding 1,219 1,217 Net earnings/(loss) $ 0.81 $ 0.73 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 993 $ 893 Weighted average shares of common stock outstanding 1,219 1,217 Effect of dilutive equity awards 9 12 Weighted average shares of common stock outstanding, including dilutive effect 1,228 1,229 Net earnings/(loss) $ 0.81 $ 0.73 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Net Sales by Segment | Net sales by segment were (in millions): For the Three Months Ended March 31, April 1, Net sales: United States $ 4,368 $ 4,518 Canada 484 440 EMEA 685 597 Rest of World 767 769 Total net sales $ 6,304 $ 6,324 |
Segment Adjusted EBITDA | Segment Adjusted EBITDA was (in millions): For the Three Months Ended March 31, April 1, Segment Adjusted EBITDA: United States $ 1,382 $ 1,464 Canada 134 125 EMEA 182 140 Rest of World 143 144 General corporate expenses (46 ) (29 ) Depreciation and amortization (excluding integration and restructuring expenses) (206 ) (222 ) Integration and restructuring expenses (90 ) (135 ) Merger costs (9 ) — Unrealized gains/(losses) on commodity hedges (2 ) (42 ) Equity award compensation expense (excluding integration and restructuring expenses) (7 ) (12 ) Operating income 1,481 1,433 Interest expense 317 313 Other expense/(income), net (90 ) (130 ) Income/(loss) before income taxes $ 1,254 $ 1,250 |
Net Sales by Product Category | Net sales by product category were (in millions): For the Three Months Ended March 31, April 1, Condiments and sauces $ 1,625 $ 1,536 Cheese and dairy 1,251 1,292 Ambient meals 634 607 Frozen and chilled meals 604 648 Meats and seafood 608 657 Refreshment beverages 375 369 Coffee 357 349 Infant and nutrition 199 188 Desserts, toppings and baking 193 194 Nuts and salted snacks 190 231 Other 268 253 Total net sales $ 6,304 $ 6,324 |
Supplemental Financial Inform38
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,169 $ 2,262 $ (127 ) $ 6,304 Cost of products sold — 2,588 1,598 (127 ) 4,059 Gross profit — 1,581 664 — 2,245 Selling, general and administrative expenses — 183 581 — 764 Intercompany service fees and other recharges — 1,155 (1,155 ) — — Operating income — 243 1,238 — 1,481 Interest expense — 298 19 — 317 Other expense/(income), net — (159 ) 69 — (90 ) Income/(loss) before income taxes — 104 1,150 — 1,254 Provision for/(benefit from) income taxes — (27 ) 288 — 261 Equity in earnings of subsidiaries 993 862 — (1,855 ) — Net income/(loss) 993 993 862 (1,855 ) 993 Net income/(loss) attributable to noncontrolling interest — — — — — Net income/(loss) excluding noncontrolling interest $ 993 $ 993 $ 862 $ (1,855 ) $ 993 Comprehensive income/(loss) excluding noncontrolling interest $ 1,072 $ 1,072 $ 1,165 $ (2,237 ) $ 1,072 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 $ — $ 4,329 $ 2,157 $ (162 ) $ 6,324 Cost of products sold — 2,762 1,525 (162 ) 4,125 Gross profit — 1,567 632 — 2,199 Selling, general and administrative expenses — 196 570 — 766 Intercompany service fees and other recharges — 1,108 (1,108 ) — — Operating income — 263 1,170 — 1,433 Interest expense — 303 10 — 313 Other expense/(income), net — (74 ) (56 ) — (130 ) 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 |
Condensed Consolidating Balance Sheets | The Kraft Heinz Company Condensed Consolidating Balance Sheets As of March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 647 $ 1,147 $ — $ 1,794 Trade receivables — 88 956 — 1,044 Receivables due from affiliates — 743 215 (958 ) — Dividends due from affiliates — — — — — Sold receivables — — 530 — 530 Income taxes receivable — 1,452 156 (1,458 ) 150 Inventories — 2,035 1,109 — 3,144 Short-term lending due from affiliates — 1,704 3,673 (5,377 ) — Other current assets — 354 429 (8 ) 775 Total current assets — 7,023 8,215 (7,801 ) 7,437 Property, plant and equipment, net — 4,601 2,666 — 7,267 Goodwill — 11,067 33,776 — 44,843 Investments in subsidiaries 66,248 80,678 — (146,926 ) — Intangible assets, net — 3,187 56,413 — 59,600 Long-term lending due from affiliates — 1,700 2,031 (3,731 ) — Other assets — 491 1,149 — 1,640 TOTAL ASSETS $ 66,248 $ 108,747 $ 104,250 $ (158,458 ) $ 120,787 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 965 $ 36 $ — $ 1,001 Current portion of long-term debt — 2,579 163 — 2,742 Short-term lending due to affiliates — 3,673 1,704 (5,377 ) — Trade payables — 2,575 1,666 — 4,241 Payables due to affiliates — 215 743 (958 ) — Accrued marketing — 142 425 — 567 Income taxes payable — 6 1,743 (1,458 ) 291 Interest payable — 339 6 — 345 Dividends due to affiliates — — — — — Other current liabilities — 451 699 (8 ) 1,142 Total current liabilities — 10,945 7,185 (7,801 ) 10,329 Long-term debt — 27,616 945 — 28,561 Long-term borrowings due to affiliates — 2,031 2,073 (4,104 ) — Deferred income taxes — 1,147 12,938 — 14,085 Accrued postemployment costs — 167 233 — 400 Other liabilities — 593 356 — 949 TOTAL LIABILITIES — 42,499 23,730 (11,905 ) 54,324 Redeemable noncontrolling interest — — 8 — 8 Total shareholders’ equity 66,248 66,248 80,305 (146,553 ) 66,248 Noncontrolling interest — — 207 — 207 TOTAL EQUITY 66,248 66,248 80,512 (146,553 ) 66,455 TOTAL LIABILITIES AND EQUITY $ 66,248 $ 108,747 $ 104,250 $ (158,458 ) $ 120,787 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of December 30, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 509 $ 1,120 $ — $ 1,629 Trade receivables — 91 830 — 921 Receivables due from affiliates — 716 207 (923 ) — Dividends due from affiliates 135 — — (135 ) — Sold receivables — — 353 — 353 Income taxes receivable — 1,904 97 (1,419 ) 582 Inventories — 1,846 969 — 2,815 Short-term lending due from affiliates — 1,598 3,816 (5,414 ) — Other current assets — 493 473 — 966 Total current assets 135 7,157 7,865 (7,891 ) 7,266 Property, plant and equipment, net — 4,577 2,543 — 7,120 Goodwill — 11,067 33,757 — 44,824 Investments in subsidiaries 66,034 80,426 — (146,460 ) — Intangible assets, net — 3,222 56,227 — 59,449 Long-term lending due from affiliates — 1,700 2,029 (3,729 ) — Other assets — 515 1,058 — 1,573 TOTAL ASSETS $ 66,169 $ 108,664 $ 103,479 $ (158,080 ) $ 120,232 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 448 $ 12 $ — $ 460 Current portion of long-term debt — 2,577 166 — 2,743 Short-term lending due to affiliates — 3,816 1,598 (5,414 ) — Trade payables — 2,718 1,731 — 4,449 Payables due to affiliates — 207 716 (923 ) — Accrued marketing — 236 444 — 680 Income taxes payable — — 1,571 (1,419 ) 152 Interest payable — 404 15 — 419 Dividends due to affiliates — 135 — (135 ) — Other current liabilities 135 473 621 — 1,229 Total current liabilities 135 11,014 6,874 (7,891 ) 10,132 Long-term debt — 27,442 891 — 28,333 Long-term borrowings due to affiliates — 2,029 1,919 (3,948 ) — Deferred income taxes — 1,245 12,831 — 14,076 Accrued postemployment costs — 184 243 — 427 Other liabilities — 716 301 — 1,017 TOTAL LIABILITIES 135 42,630 23,059 (11,839 ) 53,985 Redeemable noncontrolling interest — — 6 — 6 Total shareholders’ equity 66,034 66,034 80,207 (146,241 ) 66,034 Noncontrolling interest — — 207 — 207 TOTAL EQUITY 66,034 66,034 80,414 (146,241 ) 66,241 TOTAL LIABILITIES AND EQUITY $ 66,169 $ 108,664 $ 103,479 $ (158,080 ) $ 120,232 |
Condensed Consolidating Statements of Cash Flows | The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 897 $ 447 $ (34 ) $ (897 ) $ 413 CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 436 — 436 Capital expenditures — (101 ) (122 ) — (223 ) Payments to acquire business, net of cash acquired — (236 ) 21 — (215 ) Net proceeds from/(payments on) intercompany lending activities — 469 183 (652 ) — Additional investments in subsidiaries — (5 ) — 5 — Return of capital 6 — — (6 ) — Other investing activities, net — 6 — — 6 Net cash provided by/(used for) investing activities 6 133 518 (653 ) 4 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of commercial paper — 1,524 — — 1,524 Repayments of commercial paper — (1,006 ) — — (1,006 ) Net proceeds from/(payments on) intercompany borrowing activities — (183 ) (469 ) 652 — Dividends paid-common stock (897 ) (897 ) — 897 (897 ) Other intercompany capital stock transactions — (6 ) 5 1 — Other financing activities, net (6 ) (9 ) 18 — 3 Net cash provided by/(used for) financing activities (903 ) (577 ) (446 ) 1,550 (376 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — (10 ) — (10 ) Cash, cash equivalents, and restricted cash: Net increase/(decrease) — 3 28 — 31 Balance at beginning of period — 644 1,125 — 1,769 Balance at end of period $ — $ 647 $ 1,153 $ — $ 1,800 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 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 |
Reconciliation from Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash | 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): March 31, 2018 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 647 $ 1,147 $ — $ 1,794 Restricted cash included in other assets (current) — — 6 — 6 Cash, cash equivalents, and restricted cash $ — $ 647 $ 1,153 $ — $ 1,800 December 30, 2017 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 509 $ 1,120 $ — $ 1,629 Restricted cash included in other assets (current) — 135 5 — 140 Cash, cash equivalents, and restricted cash $ — $ 644 $ 1,125 $ — $ 1,769 |
Background and Basis of Prese39
Background and Basis of Presentation New Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
Net sales | $ (6,304) | $ (6,324) | |
Cost of products sold | (4,059) | (4,125) | |
Selling, general and administrative expenses | $ (764) | (766) | |
U.S. federal statutory tax rate | 21.00% | 35.00% | |
Accounting Standards Update 2016-16 | |||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
New accounting pronouncement or change in accounting principle, cumulative effect of change on equity or net assets | $ (95) | ||
Adjustment | |||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
Net sales | 40 | ||
Cost of products sold | (62) | ||
Selling, general and administrative expenses | (16) | ||
Adjustments for Error Corrections | Adjustment | |||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
Net sales | 40 | ||
Cost of products sold | 38 | ||
Selling, general and administrative expenses | $ 2 |
Background and Basis of Prese40
Background and Basis of Presentation Impacts of Adopting ASUs and Reclassifications on Historical Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | $ 6,304 | $ 6,324 |
Cost of products sold | 4,059 | 4,125 |
Gross profit | 2,245 | 2,199 |
Selling, general and administrative expenses | 764 | 766 |
Operating income | 1,481 | 1,433 |
Other expense/(income), net | (90) | (130) |
Income/(loss) before income taxes | $ 1,254 | 1,250 |
As Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | 6,364 | |
Cost of products sold | 4,063 | |
Gross profit | 2,301 | |
Selling, general and administrative expenses | 750 | |
Operating income | 1,551 | |
Other expense/(income), net | (12) | |
Income/(loss) before income taxes | 1,250 | |
Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | (40) | |
Cost of products sold | 62 | |
Gross profit | (102) | |
Selling, general and administrative expenses | 16 | |
Operating income | (118) | |
Other expense/(income), net | (118) | |
Income/(loss) before income taxes | $ 0 |
Acquisition Additional Informat
Acquisition Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 09, 2018 | Dec. 30, 2017 | |
Business Combinations [Abstract] | |||
Total consideration paid | $ 238 | ||
Goodwill on acquisition | $ 44,843 | $ 17 | $ 44,824 |
Merger costs | $ 9 |
Acquisition Preliminary Purchas
Acquisition Preliminary Purchase Price Allocation to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Mar. 09, 2018 | Dec. 30, 2017 |
Business Combinations [Abstract] | |||
Cash | $ 23 | ||
Other current assets | 65 | ||
Property, plant and equipment, net | 77 | ||
Identifiable intangible assets | 100 | ||
Trade and other payables | (40) | ||
Other non-current liabilities | (4) | ||
Net assets acquired | 221 | ||
Goodwill on acquisition | $ 44,843 | 17 | $ 44,824 |
Total consideration | $ 238 |
Acquisition Preliminary Purch43
Acquisition Preliminary Purchase Price Allocation to Identifiable Intangible Assets Acquired (Details) $ in Millions | Mar. 09, 2018USD ($) |
Business Acquisition [Line Items] | |
Identifiable intangible assets acquired | $ 100 |
Trademarks | |
Business Acquisition [Line Items] | |
Identifiable intangible assets acquired | $ 87 |
Definite-lived intangible asset, weighted average life | 22 years |
Customer-related assets | |
Business Acquisition [Line Items] | |
Identifiable intangible assets acquired | $ 13 |
Definite-lived intangible asset, weighted average life | 12 years |
Integration and Restructuring44
Integration and Restructuring Expenses Additional Information (Details) $ in Millions | 3 Months Ended | 33 Months Ended | |
Mar. 31, 2018USD ($)employee | Apr. 01, 2017USD ($) | Mar. 31, 2018USD ($)employeefactory | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred cost | $ 90 | $ 148 | |
Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, cash expenditures, percent | 60.00% | 60.00% | |
Restructuring and related cost, number of facilities eliminated | factory | 6 | ||
Restructuring and related cost, number of positions eliminated | employee | 4,900 | ||
Restructuring and related cost, cost incurred to date | $ 2,113 | $ 2,113 | |
Restructuring and related cost, incurred cost | 58 | 127 | |
Restructuring and related cost, expected cost remaining | 30 | 30 | |
Integration Program | Severance and Employee Benefit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, cost incurred to date | 539 | 539 | |
Integration Program | Asset-Related Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, cost incurred to date | 878 | 878 | |
Restructuring and related cost, incurred cost | 20 | ||
Integration Program | Other Implementation Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, cost incurred to date | 588 | 588 | |
Restructuring and related cost, incurred cost | 38 | ||
Integration Program | Other Exit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, cost incurred to date | $ 108 | $ 108 | |
Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, number of positions eliminated | employee | 70 | ||
Restructuring and related cost, incurred cost | $ 32 | $ 21 | |
Restructuring and related cost, expected number of positions eliminated | employee | 700 | ||
Restructuring Activities | Severance and Employee Benefit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred cost | $ 21 | ||
Restructuring Activities | Other Implementation Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred cost | $ 11 |
Integration and Restructuring45
Integration and Restructuring Expenses Integration Program Reserve Roll-forward (Details) - Integration Program $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 46 |
Cash payments | (6) |
Restructuring reserve, non-cash utilization | (9) |
Ending Balance | 31 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 24 |
Cash payments | (5) |
Restructuring reserve, non-cash utilization | (9) |
Ending Balance | 10 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 22 |
Cash payments | (1) |
Restructuring reserve, non-cash utilization | 0 |
Ending Balance | $ 21 |
Integration and Restructuring46
Integration and Restructuring Expenses Restructuring Reserve Roll-forward (Details) - Restructuring Activities $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 41 |
Charges/(credits) | 21 |
Cash payments | (7) |
Restructuring reserve, non-cash utilization | 9 |
Ending Balance | 64 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 16 |
Charges/(credits) | 21 |
Cash payments | (6) |
Restructuring reserve, non-cash utilization | 9 |
Ending Balance | 40 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 25 |
Charges/(credits) | 0 |
Cash payments | (1) |
Restructuring reserve, non-cash utilization | 0 |
Ending Balance | $ 24 |
Integration and Restructuring47
Integration and Restructuring Expenses Restructuring Costs by Type and Income Statement Location (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | $ 90 | $ 148 |
Severance and Employee Benefit Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 16 | 12 |
Severance and Employee Benefit Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 5 | 19 |
Severance and Employee Benefit Costs | Other expense/(income), net | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 0 | 13 |
Asset-Related Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 20 | 75 |
Asset-Related Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 0 | 7 |
Other Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | 40 | 9 |
Other Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | $ 9 | $ 13 |
Integration and Restructuring48
Integration and Restructuring Expenses Restructuring Costs Excluded from Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | $ 90 | $ 148 |
United States | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | 52 | 108 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | 3 | 10 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | 21 | 14 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | 0 | 0 |
General corporate expenses | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred cost | $ 14 | $ 16 |
Restricted Cash Reconciliation
Restricted Cash Reconciliation from Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 | Dec. 31, 2016 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 1,794 | $ 1,629 | ||
Restricted cash included in other assets (current) | 6 | 140 | ||
Cash, cash equivalents, and restricted cash | $ 1,800 | $ 1,769 | $ 3,282 | $ 4,255 |
Inventories Components of Inven
Inventories Components of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Packaging and ingredients | $ 588 | $ 560 |
Work in process | 478 | 439 |
Finished product | 2,078 | 1,816 |
Inventories | $ 3,144 | $ 2,815 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 44,824 |
Translation adjustments | 2 |
Purchase accounting adjustments | 17 |
Ending balance | 44,843 |
United States | |
Goodwill [Roll Forward] | |
Beginning balance | 33,700 |
Translation adjustments | 0 |
Purchase accounting adjustments | 0 |
Ending balance | 33,700 |
Canada | |
Goodwill [Roll Forward] | |
Beginning balance | 5,246 |
Translation adjustments | (128) |
Purchase accounting adjustments | 0 |
Ending balance | 5,118 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning balance | 3,238 |
Translation adjustments | 107 |
Purchase accounting adjustments | 0 |
Ending balance | 3,345 |
Rest of World | |
Goodwill [Roll Forward] | |
Beginning balance | 2,640 |
Translation adjustments | 23 |
Purchase accounting adjustments | 17 |
Ending balance | $ 2,680 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets Goodwill - Additional Information (Details) | Apr. 02, 2017USD ($) | Mar. 31, 2018USD ($)goodwill_reporting_unit | Mar. 09, 2018USD ($) | Dec. 30, 2017USD ($) |
Goodwill [Line Items] | ||||
Goodwill, impairment loss | $ 0 | |||
Reporting unit, percentage of fair value in excess of carrying amount | 10.00% | |||
Number of reporting units | goodwill_reporting_unit | 20 | |||
Goodwill | $ 44,843,000,000 | $ 17,000,000 | $ 44,824,000,000 | |
Goodwill, impaired, accumulated impairment loss | 0 | |||
EMEA | ||||
Goodwill [Line Items] | ||||
Goodwill | 3,345,000,000 | 3,238,000,000 | ||
EMEA | Goodwill | ||||
Goodwill [Line Items] | ||||
Prior period reclassification adjustment | 179,000,000 | |||
Rest of World | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,680,000,000 | $ 2,640,000,000 | ||
Rest of World | Goodwill | ||||
Goodwill [Line Items] | ||||
Prior period reclassification adjustment | $ (179,000,000) |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 53,655 |
Translation adjustments | 102 |
Ending balance | $ 53,757 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jul. 01, 2017 | Mar. 31, 2018 | Dec. 30, 2017 | Apr. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment losses on indefinite-lived intangible assets | $ 49 | |||
Reporting unit, percentage of fair value in excess of carrying amount | 10.00% | |||
Indefinite-lived intangible assets | $ 53,757 | $ 53,655 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets Definite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | $ 6,753 | $ 6,631 |
Accumulated amortization | (910) | (837) |
Net | 5,843 | 5,794 |
Trademarks | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 2,478 | 2,386 |
Accumulated amortization | (317) | (288) |
Net | 2,161 | 2,098 |
Customer-related assets | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 4,254 | 4,231 |
Accumulated amortization | (588) | (544) |
Net | 3,666 | 3,687 |
Other | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 21 | 14 |
Accumulated amortization | (5) | (5) |
Net | $ 16 | $ 9 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets Definite-Lived Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 70 | $ 67 |
Amortization of intangible assets, next twelve months | 275 | |
Amortization of intangible assets, year two | 275 | |
Amortization of intangible assets, year three | 275 | |
Amortization of intangible assets, year four | 275 | |
Amortization of intangible assets, year five | 275 | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, purchase accounting adjustments | 87 | |
Customer-related assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, purchase accounting adjustments | $ 13 |
Income Taxes Additional Informa
Income Taxes Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective Tax Rate | 20.80% | 28.70% | |
U.S. federal statutory tax rate | 21.00% | 35.00% | |
Tax Cuts and Jobs Act of 2017, Measurement Period Adjustment, Income Tax Expense (Benefit) | $ 20 | ||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Undistributed Accumulated Earnings of Foreign Subsidiary, Provisional Unrecognized Deferred Tax Liability | $ 96 |
Employees' Stock Incentive Pl58
Employees' Stock Incentive Plans Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options, exercises in period, intrinsic value | $ 20 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments other than options, vested in period, fair value | $ 8 |
Employees' Stock Incentive Pl59
Employees' Stock Incentive Plans Schedule of Stock Option Activity and Related Information (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Roll-forward of Stock Option Activity (in shares) | |
Beginning balance | shares | 19,289,564 |
Granted | shares | 1,420,250 |
Forfeited | shares | (408,067) |
Exercised | shares | (476,048) |
Ending balance | shares | 19,825,699 |
Stock Option Activity, Weighted Average Exercise Price [Abstract] | |
Options outstanding at period start, weighted average exercise price (in dollars per share) | $ / shares | $ 41.63 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 66.89 |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 44.45 |
Options exercised, weighted average exercise price (in dollars per share) | $ / shares | 32.19 |
Options outstanding at period end, weighted average exercise price (in dollars per share) | $ / shares | $ 43.61 |
Employees' Stock Incentive Pl60
Employees' Stock Incentive Plans Schedule of RSU Activity and Related Information (Details) - RSUs | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Roll-forward of RSU Activity (in shares) | |
Beginning balance | shares | 1,284,262 |
Granted | shares | 1,352,251 |
Forfeited | shares | (49,633) |
Vested | shares | (113,671) |
Ending balance | shares | 2,473,209 |
Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding at period start, weighted average grant date fair value (in dollars per share) | $ / shares | $ 81.91 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 58.78 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 86.85 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 73.12 |
Outstanding at period end, weighted average grant date fair value (in dollars per share) | $ / shares | $ 69.57 |
Employees' Stock Incentive Pl61
Employees' Stock Incentive Plans Schedule of PSU Activity and Related Information (Details) - PSUs | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Roll-forward of PSU Activity (in shares) | |
Beginning balance | shares | 815,383 |
Granted | shares | 2,595,333 |
Forfeited | shares | (32,812) |
Ending balance | shares | 3,377,904 |
Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding at period start, weighted average grant date fair value (in dollars per share) | $ / shares | $ 70.16 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 56.82 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 69.02 |
Outstanding at period end, weighted average grant date fair value (in dollars per share) | $ / shares | $ 59.92 |
Postemployment Benefits Postemp
Postemployment Benefits Postemployment Benefit Plans - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan, net periodic benefit cost (credit) reversal | $ 42,000,000 |
Defined benefit plan, amortization of prior service cost/(credit) reversal | 28,000,000 |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contributions | (17,000,000) |
Estimated future employer contributions in 2018 | 10,000,000 |
Non-U.S. Plans | Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contributions | (5,000,000) |
Estimated future employer contributions in 2018 | 50,000,000 |
U.S. Plans | Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contributions | 0 |
Estimated future employer contributions in 2018 | $ 0 |
Postemployment Benefits Pension
Postemployment Benefits Pension Plans - Net Cost/(Benefit) (Details) - Pension Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 2 | $ 3 |
Interest cost | 39 | 45 |
Expected return on plan assets | (63) | (65) |
Amortization of unrecognized losses/(gains) | 0 | 0 |
Special/contractual termination benefits | 0 | 7 |
Other | 0 | 2 |
Net pension cost/(benefit) | (22) | (8) |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 5 | 4 |
Interest cost | 19 | 16 |
Expected return on plan assets | (48) | (43) |
Amortization of unrecognized losses/(gains) | 1 | 0 |
Special/contractual termination benefits | 1 | 6 |
Other | 0 | (9) |
Net pension cost/(benefit) | $ (22) | $ (26) |
Postemployment Benefits Postret
Postemployment Benefits Postretirement Benefit Plans - Net Cost/(Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Amortization of prior service costs/(credits) | $ (106) | $ (82) |
Postretirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 2 | 2 |
Interest cost | 11 | 13 |
Expected return on plan assets | (12) | 0 |
Amortization of prior service costs/(credits) | (78) | (90) |
Net pension cost/(benefit) | $ (77) | $ (75) |
Financial Instruments Schedule
Financial Instruments Schedule of Notional Values of Outstanding Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Commodity contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 389 | $ 272 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | 3,447 | 2,876 |
Cross-currency contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 3,161 | $ 3,161 |
Financial Instruments Schedul66
Financial Instruments Schedule of Derivative Fair Values (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | $ 379 | $ 392 |
Derivative liability, fair value, gross liability | 44 | 53 |
Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 12 | 8 |
Derivative liability, fair value, gross liability | 28 | 42 |
Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 14 | 17 |
Derivative liability, fair value, gross liability | 5 | 3 |
Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 329 | 344 |
Derivative liability, fair value, gross liability | 0 | 0 |
Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 18 | 19 |
Derivative liability, fair value, gross liability | 0 | 0 |
Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 6 | 4 |
Derivative liability, fair value, gross liability | 11 | 8 |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 6 | 4 |
Derivative liability, fair value, gross liability | 11 | 8 |
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 1 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 6 | 4 |
Derivative liability, fair value, gross liability | 11 | 8 |
Level 2 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 373 | 388 |
Derivative liability, fair value, gross liability | 33 | 45 |
Level 2 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 12 | 8 |
Derivative liability, fair value, gross liability | 28 | 42 |
Level 2 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 14 | 17 |
Derivative liability, fair value, gross liability | 5 | 3 |
Level 2 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 329 | 344 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 2 | Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 18 | 19 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 2 | 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 | ||
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 |
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 |
Financial Instruments Additiona
Financial Instruments Additional Information (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | |||||
Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Mar. 31, 2018GBP (£) | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Dec. 30, 2017USD ($) | |
Derivative [Line Items] | ||||||
Derivative, collateral, right to reclaim cash | $ 30 | $ 23 | ||||
Derivative, collateral, obligation to return cash | 30 | $ 23 | ||||
Foreign exchange contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 21 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 | 21 months | |||||
Cross-currency contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 19 months | |||||
Commodity contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 9 months | |||||
Net Investment Hedging | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Non-derivative instruments, loss (gain) recognized in other comprehensive income (loss), net | $ 103 | $ 44 | ||||
Net Investment Hedging | Foreign exchange contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative liability, notional amount | $ 221 | |||||
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 Schedul68
Financial Instruments Schedule of Cross-Currency Swaps Designated as Net Investment Hedges (Details) - Mar. 31, 2018 - Net Investment Hedging - Designated as hedging instrument - Cross-currency contracts £ in Billions, $ in Billions, $ in Billions | GBP (£) | USD ($) | CAD ($) |
United Kingdom, Pounds | |||
Derivative [Line Items] | |||
Derivative asset, notional amount | £ 0.8 | $ 1.4 | |
Canada, Dollars | |||
Derivative [Line Items] | |||
Derivative asset, notional amount | $ 1.6 | $ 1.8 |
Financial Instruments Derivativ
Financial Instruments Derivative Impact on Statements of Income and Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | $ (5) | $ (37) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (5) | (37) |
Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 33 | (14) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 33 | (14) |
Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Designated as hedging instrument | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Designated as hedging instrument | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 14 | (43) |
Net gain/(loss) recognized in income | 13 | (16) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 13 | (16) |
Designated as hedging instrument | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | (11) | (30) |
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Designated as hedging instrument | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Not designated as hedging instrument | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (5) | (37) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (5) | (37) |
Not designated as hedging instrument | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 20 | 2 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 20 | 2 |
Not designated as hedging instrument | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Not designated as hedging instrument | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (5) | (37) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (5) | (37) |
Not designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 20 | 2 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 20 | 2 |
Not designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Not designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 25 | (39) |
Cash Flow Hedging | Designated as hedging instrument | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income (effective portion) | (5) | (1) |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 18 | (15) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 18 | (15) |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Derivatives not designated as hedging instruments: | ||
Net gain/(loss) recognized in income | (1) | (1) |
Net Investment Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | 0 | 0 |
Net Investment Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | (11) | (4) |
Net Investment Hedging | Designated as hedging instrument | Cross-currency contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | (11) | (30) |
Net Investment Hedging | Designated as hedging instrument | Interest rate contracts | ||
Derivatives designated as hedging instruments: | ||
Net gain/(loss) recognized in other comprehensive income (effective portion) | $ 0 | $ 0 |
Accumulated Other Comprehensi70
Accumulated Other Comprehensive Income/(Losses) Components of and Changes in Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ (1,054) | |
Foreign currency translation adjustments | 197 | $ 307 |
Net deferred gains/(losses) on net investment hedges | (74) | (51) |
Net deferred gains/(losses) on cash flow hedges | 22 | (34) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (13) | 20 |
Reclassification of net postemployment benefit losses/(gains) | (58) | (55) |
Ending balance | (975) | |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (1,587) | |
Foreign currency translation adjustments | 202 | |
Net deferred gains/(losses) on net investment hedges | (74) | |
Net deferred gains/(losses) on cash flow hedges | 0 | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 0 | |
Reclassification of net postemployment benefit losses/(gains) | 0 | |
Total other comprehensive income/(loss) | 128 | |
Ending balance | (1,459) | |
Net Postemployment Benefit Plan Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 549 | |
Foreign currency translation adjustments | 0 | |
Net deferred gains/(losses) on net investment hedges | 0 | |
Net deferred gains/(losses) on cash flow hedges | 0 | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 0 | |
Reclassification of net postemployment benefit losses/(gains) | (58) | |
Total other comprehensive income/(loss) | (58) | |
Ending balance | 491 | |
Net Cash Flow Hedge Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (16) | |
Foreign currency translation adjustments | 0 | |
Net deferred gains/(losses) on net investment hedges | 0 | |
Net deferred gains/(losses) on cash flow hedges | 22 | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (13) | |
Reclassification of net postemployment benefit losses/(gains) | 0 | |
Total other comprehensive income/(loss) | 9 | |
Ending balance | (7) | |
AOCI Attributable to Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (1,054) | |
Foreign currency translation adjustments | 202 | 309 |
Net deferred gains/(losses) on net investment hedges | (74) | (51) |
Net deferred gains/(losses) on cash flow hedges | 22 | (34) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (13) | 20 |
Reclassification of net postemployment benefit losses/(gains) | (58) | $ (55) |
Total other comprehensive income/(loss) | 79 | |
Ending balance | $ (975) |
Accumulated Other Comprehensi71
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 | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Accumulated Other Comprehensive Income/(Loss) [Line Items] | ||
Foreign currency translation adjustments, net of tax | $ 197 | $ 307 |
Net deferred gains/(losses) on net investment hedges, net of tax | (74) | (51) |
Net deferred gains/(losses) on cash flow hedges, net of tax | 22 | (34) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | (13) | 20 |
Net actuarial gains/(losses) arising during the period, net of tax | 0 | (10) |
Reclassification of net postemployment benefit losses/(gains), net of tax | (58) | (55) |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income/(Loss) [Line Items] | ||
Foreign currency translation adjustments, before tax | 202 | 309 |
Foreign currency translation adjustments, tax | 0 | 0 |
Foreign currency translation adjustments, net of tax | 202 | 309 |
Net deferred gains/(losses) on net investment hedges, before tax | (125) | (78) |
Net deferred gains/(losses) on net investment hedges, tax | 51 | 27 |
Net deferred gains/(losses) on net investment hedges, net of tax | (74) | (51) |
Net deferred gains/(losses) on cash flow hedges, before tax | 25 | (39) |
Net deferred gains/(losses) on cash flow hedges, tax | (3) | 5 |
Net deferred gains/(losses) on cash flow hedges, net of tax | 22 | (34) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, before tax | (12) | 17 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, tax | (1) | 3 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | (13) | 20 |
Net actuarial gains/(losses) arising during the period, before tax | 0 | (12) |
Net actuarial gains/(losses) arising during the period, tax | 0 | 2 |
Net actuarial gains/(losses) arising during the period, net of tax | 0 | (10) |
Reclassification of net postemployment benefit losses/(gains), before tax | (77) | (90) |
Reclassification of net postemployment benefit losses/(gains), tax | 19 | 35 |
Reclassification of net postemployment benefit losses/(gains), net of tax | $ (58) | $ (55) |
Accumulated Other Comprehensi72
Accumulated Other Comprehensive Income/(Losses) Amounts Reclassified from Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
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 | $ (13) | $ 20 |
Reclassification of net postemployment benefit losses/(gains), net of tax | (58) | (55) |
AOCI Attributable to Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | (12) | 17 |
Losses/(gains) on cash flow hedges, income taxes | (1) | 3 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | (13) | 20 |
Amortization of unrecognized losses/(gains) | 1 | 0 |
Amortization of prior service costs/(credits) | (78) | (90) |
Losses/(gains) on postemployment benefits before income taxes | (77) | (90) |
Losses/(gains) on postemployment benefits, income taxes | 19 | 35 |
Reclassification of net postemployment benefit losses/(gains), net of tax | (58) | (55) |
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 | 5 | 1 |
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 | (18) | 15 |
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 |
Venezuela - Foreign Currency 73
Venezuela - Foreign Currency and Inflation Additional Information (Details) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2018USD ($) / $ | Apr. 01, 2017USD ($) | Feb. 01, 2018 / $ | Dec. 30, 2017USD ($) | Sep. 30, 2017 / $ | Mar. 09, 2016 / $ | |
Foreign Currency [Line Items] | ||||||
Outstanding requests for currency settlements at the official exchange rate | $ | $ 26 | |||||
Nonmonetary currency devaluation loss/(gain) | $ | $ 47 | $ 8 | ||||
Official CENCOEX BsF Rate | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 10 | 6.30 | ||||
Venezuelan BsF on DICOM market, period end spot | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 49,478 | 25,000 | 3,345 | |||
Venezuelan BsF on DICOM market, year-to-date average | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 18,081 |
Financing Arrangements Addition
Financing Arrangements Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Transfers and Servicing [Abstract] | ||
Receivables derecognized under accounts receivable factoring programs | $ 1,200 | $ 1,000 |
Cash received in exchange for receivables derecognized as of period end | 659 | 673 |
Sold receivables | 530 | 353 |
Other liabilities, structured payables, current | $ 141 | $ 188 |
Commitments, Contingencies an75
Commitments, Contingencies and Debt Redeemable Noncontrolling Interest (Details) $ in Millions | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Redemption value of redeemable noncontrolling interest | $ 100 |
Commitments, Contingencies an76
Commitments, Contingencies and Debt Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Debt Disclosure [Abstract] | ||
Commercial paper | $ 965 | $ 448 |
Fair value of total debt | 32,600 | 33,000 |
Carrying value of total debt | $ 32,300 | $ 31,500 |
Earnings Per Share Schedule of
Earnings Per Share Schedule of Earnings Per Common Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Basic EPS | ||
Net income/(loss) attributable to common shareholders | $ 993 | $ 893 |
Weighted average shares of common stock outstanding (in shares) | 1,219 | 1,217 |
Basic earnings/(loss) per common share (in dollars per share) | $ 0.81 | $ 0.73 |
Diluted EPS | ||
Net income/(loss) attributable to common shareholders | $ 993 | $ 893 |
Weighted average shares of common stock outstanding (in shares) | 1,219 | 1,217 |
Effect of dilutive equity awards (in shares) | 9 | 12 |
Weighted average shares of common stock outstanding, including dilutive effect (in shares) | 1,228 | 1,229 |
Diluted earnings/(loss) per common share (in dollars per share) | $ 0.81 | $ 0.73 |
Earnings Per Share Additional I
Earnings Per Share Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares | 5 | 1 |
Segment Reporting Additional In
Segment Reporting Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating 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 | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 6,304 | $ 6,324 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4,368 | 4,518 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | 484 | 440 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Net sales | 685 | 597 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 767 | $ 769 |
Segment Reporting Segment Adjus
Segment Reporting Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Depreciation and amortization (excluding integration and restructuring expenses) | $ (206) | $ (222) |
Integration and restructuring expenses | (90) | (135) |
Merger costs | 9 | 0 |
Unrealized gains/(losses) on commodity hedges | (2) | (42) |
Equity award compensation expense (excluding integration and restructuring expenses) | (7) | (12) |
Operating income | 1,481 | 1,433 |
Interest expense | 317 | 313 |
Other expense/(income), net | (90) | (130) |
Income/(loss) before income taxes | 1,254 | 1,250 |
United States | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA: | 1,382 | 1,464 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA: | 134 | 125 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA: | 182 | 140 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA: | 143 | 144 |
General corporate expenses | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA: | $ (46) | $ (29) |
Segment Reporting Net Sales b82
Segment Reporting Net Sales by Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 6,304 | $ 6,324 |
Condiments and sauces | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,625 | 1,536 |
Cheese and dairy | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,251 | 1,292 |
Ambient meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 634 | 607 |
Frozen and chilled meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 604 | 648 |
Meats and seafood | ||
Revenue from External Customer [Line Items] | ||
Net sales | 608 | 657 |
Refreshment beverages | ||
Revenue from External Customer [Line Items] | ||
Net sales | 375 | 369 |
Coffee | ||
Revenue from External Customer [Line Items] | ||
Net sales | 357 | 349 |
Infant and nutrition | ||
Revenue from External Customer [Line Items] | ||
Net sales | 199 | 188 |
Desserts, toppings and baking | ||
Revenue from External Customer [Line Items] | ||
Net sales | 193 | 194 |
Nuts and salted snacks | ||
Revenue from External Customer [Line Items] | ||
Net sales | 190 | 231 |
Total net sales | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 268 | $ 253 |
Supplemental Financial Inform83
Supplemental Financial Information Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Condensed Income Statements, Captions [Line Items] | ||
Net sales | $ 6,304 | $ 6,324 |
Cost of products sold | 4,059 | 4,125 |
Gross profit | 2,245 | 2,199 |
Selling, general and administrative expenses | 764 | 766 |
Intercompany service fees and other recharges | 0 | 0 |
Operating income | 1,481 | 1,433 |
Interest expense | 317 | 313 |
Other expense/(income), net | (90) | (130) |
Income/(loss) before income taxes | 1,254 | 1,250 |
Provision for/(benefit from) income taxes | 261 | 359 |
Equity in earnings of subsidiaries | 0 | 0 |
Net income/(loss) | 993 | 891 |
Net income/(loss) attributable to noncontrolling interest | 0 | (2) |
Net income/(loss) excluding noncontrolling interest | 993 | 893 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,072 |
Eliminations | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | (127) | (162) |
Cost of products sold | (127) | (162) |
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 | (1,855) | (1,740) |
Net income/(loss) | (1,855) | (1,740) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | (1,855) | (1,740) |
Comprehensive income/(loss) excluding noncontrolling interest | (2,237) | (2,914) |
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 | 993 | 893 |
Net income/(loss) | 993 | 893 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | 993 | 893 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,072 |
Subsidiary Issuer | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 4,169 | 4,329 |
Cost of products sold | 2,588 | 2,762 |
Gross profit | 1,581 | 1,567 |
Selling, general and administrative expenses | 183 | 196 |
Intercompany service fees and other recharges | 1,155 | 1,108 |
Operating income | 243 | 263 |
Interest expense | 298 | 303 |
Other expense/(income), net | (159) | (74) |
Income/(loss) before income taxes | 104 | 34 |
Provision for/(benefit from) income taxes | (27) | (12) |
Equity in earnings of subsidiaries | 862 | 847 |
Net income/(loss) | 993 | 893 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | 993 | 893 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,072 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 2,262 | 2,157 |
Cost of products sold | 1,598 | 1,525 |
Gross profit | 664 | 632 |
Selling, general and administrative expenses | 581 | 570 |
Intercompany service fees and other recharges | (1,155) | (1,108) |
Operating income | 1,238 | 1,170 |
Interest expense | 19 | 10 |
Other expense/(income), net | 69 | (56) |
Income/(loss) before income taxes | 1,150 | 1,216 |
Provision for/(benefit from) income taxes | 288 | 371 |
Equity in earnings of subsidiaries | 0 | 0 |
Net income/(loss) | 862 | 845 |
Net income/(loss) attributable to noncontrolling interest | 0 | (2) |
Net income/(loss) excluding noncontrolling interest | 862 | 847 |
Comprehensive income/(loss) excluding noncontrolling interest | $ 1,165 | $ 1,842 |
Supplemental Financial Inform84
Supplemental Financial Information Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Mar. 09, 2018 | Dec. 30, 2017 |
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Cash and cash equivalents | $ 1,794 | $ 1,629 | |
Trade receivables | 1,044 | 921 | |
Receivables due from affiliates | 0 | 0 | |
Dividends due from affiliates | 0 | 0 | |
Sold receivables | 530 | 353 | |
Income taxes receivable | 150 | 582 | |
Inventories | 3,144 | 2,815 | |
Short-term lending due from affiliates | 0 | 0 | |
Other current assets | 775 | 966 | |
Total current assets | 7,437 | 7,266 | |
Property, plant and equipment, net | 7,267 | 7,120 | |
Goodwill | 44,843 | $ 17 | 44,824 |
Investments in subsidiaries | 0 | 0 | |
Intangible assets, net | 59,600 | 59,449 | |
Long-term lending due from affiliates | 0 | 0 | |
Other assets | 1,640 | 1,573 | |
TOTAL ASSETS | 120,787 | 120,232 | |
Commercial paper and other short-term debt | 1,001 | 460 | |
Current portion of long-term debt | 2,742 | 2,743 | |
Short-term lending due to affiliates | 0 | 0 | |
Trade payables | 4,241 | 4,449 | |
Payables due to affiliates | 0 | 0 | |
Accrued marketing | 567 | 680 | |
Income taxes payable | 291 | 152 | |
Interest payable | 345 | 419 | |
Dividends due to affiliates | 0 | 0 | |
Other current liabilities | 1,142 | 1,229 | |
Total current liabilities | 10,329 | 10,132 | |
Long-term debt | 28,561 | 28,333 | |
Long-term borrowings due to affiliates | 0 | 0 | |
Deferred income taxes | 14,085 | 14,076 | |
Accrued postemployment costs | 400 | 427 | |
Other liabilities | 949 | 1,017 | |
TOTAL LIABILITIES | 54,324 | 53,985 | |
Redeemable noncontrolling interest | 8 | 6 | |
Total shareholders’ equity | 66,248 | 66,034 | |
Noncontrolling interest | 207 | 207 | |
TOTAL EQUITY | 66,455 | 66,241 | |
TOTAL LIABILITIES AND EQUITY | 120,787 | 120,232 | |
Eliminations | |||
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Trade receivables | 0 | 0 | |
Receivables due from affiliates | (958) | (923) | |
Dividends due from affiliates | 0 | (135) | |
Sold receivables | 0 | 0 | |
Income taxes receivable | (1,458) | (1,419) | |
Inventories | 0 | 0 | |
Short-term lending due from affiliates | (5,377) | (5,414) | |
Other current assets | (8) | 0 | |
Total current assets | (7,801) | (7,891) | |
Property, plant and equipment, net | 0 | 0 | |
Goodwill | 0 | 0 | |
Investments in subsidiaries | (146,926) | (146,460) | |
Intangible assets, net | 0 | 0 | |
Long-term lending due from affiliates | (3,731) | (3,729) | |
Other assets | 0 | 0 | |
TOTAL ASSETS | (158,458) | (158,080) | |
Commercial paper and other short-term debt | 0 | 0 | |
Current portion of long-term debt | 0 | 0 | |
Short-term lending due to affiliates | (5,377) | (5,414) | |
Trade payables | 0 | 0 | |
Payables due to affiliates | (958) | (923) | |
Accrued marketing | 0 | 0 | |
Income taxes payable | (1,458) | (1,419) | |
Interest payable | 0 | 0 | |
Dividends due to affiliates | 0 | (135) | |
Other current liabilities | (8) | 0 | |
Total current liabilities | (7,801) | (7,891) | |
Long-term debt | 0 | 0 | |
Long-term borrowings due to affiliates | (4,104) | (3,948) | |
Deferred income taxes | 0 | 0 | |
Accrued postemployment costs | 0 | 0 | |
Other liabilities | 0 | 0 | |
TOTAL LIABILITIES | (11,905) | (11,839) | |
Redeemable noncontrolling interest | 0 | 0 | |
Total shareholders’ equity | (146,553) | (146,241) | |
Noncontrolling interest | 0 | 0 | |
TOTAL EQUITY | (146,553) | (146,241) | |
TOTAL LIABILITIES AND EQUITY | (158,458) | (158,080) | |
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 | 0 | 135 | |
Sold receivables | 0 | 0 | |
Income taxes receivable | 0 | 0 | |
Inventories | 0 | 0 | |
Short-term lending due from affiliates | 0 | 0 | |
Other current assets | 0 | 0 | |
Total current assets | 0 | 135 | |
Property, plant and equipment, net | 0 | 0 | |
Goodwill | 0 | 0 | |
Investments in subsidiaries | 66,248 | 66,034 | |
Intangible assets, net | 0 | 0 | |
Long-term lending due from affiliates | 0 | 0 | |
Other assets | 0 | 0 | |
TOTAL ASSETS | 66,248 | 66,169 | |
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 | |
Income taxes payable | 0 | 0 | |
Interest payable | 0 | 0 | |
Dividends due to affiliates | 0 | 0 | |
Other current liabilities | 0 | 135 | |
Total current liabilities | 0 | 135 | |
Long-term debt | 0 | 0 | |
Long-term borrowings due to affiliates | 0 | 0 | |
Deferred income taxes | 0 | 0 | |
Accrued postemployment costs | 0 | 0 | |
Other liabilities | 0 | 0 | |
TOTAL LIABILITIES | 0 | 135 | |
Redeemable noncontrolling interest | 0 | 0 | |
Total shareholders’ equity | 66,248 | 66,034 | |
Noncontrolling interest | 0 | 0 | |
TOTAL EQUITY | 66,248 | 66,034 | |
TOTAL LIABILITIES AND EQUITY | 66,248 | 66,169 | |
Subsidiary Issuer | Reportable Legal Entities | |||
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Cash and cash equivalents | 647 | 509 | |
Trade receivables | 88 | 91 | |
Receivables due from affiliates | 743 | 716 | |
Dividends due from affiliates | 0 | 0 | |
Sold receivables | 0 | 0 | |
Income taxes receivable | 1,452 | 1,904 | |
Inventories | 2,035 | 1,846 | |
Short-term lending due from affiliates | 1,704 | 1,598 | |
Other current assets | 354 | 493 | |
Total current assets | 7,023 | 7,157 | |
Property, plant and equipment, net | 4,601 | 4,577 | |
Goodwill | 11,067 | 11,067 | |
Investments in subsidiaries | 80,678 | 80,426 | |
Intangible assets, net | 3,187 | 3,222 | |
Long-term lending due from affiliates | 1,700 | 1,700 | |
Other assets | 491 | 515 | |
TOTAL ASSETS | 108,747 | 108,664 | |
Commercial paper and other short-term debt | 965 | 448 | |
Current portion of long-term debt | 2,579 | 2,577 | |
Short-term lending due to affiliates | 3,673 | 3,816 | |
Trade payables | 2,575 | 2,718 | |
Payables due to affiliates | 215 | 207 | |
Accrued marketing | 142 | 236 | |
Income taxes payable | 6 | 0 | |
Interest payable | 339 | 404 | |
Dividends due to affiliates | 0 | 135 | |
Other current liabilities | 451 | 473 | |
Total current liabilities | 10,945 | 11,014 | |
Long-term debt | 27,616 | 27,442 | |
Long-term borrowings due to affiliates | 2,031 | 2,029 | |
Deferred income taxes | 1,147 | 1,245 | |
Accrued postemployment costs | 167 | 184 | |
Other liabilities | 593 | 716 | |
TOTAL LIABILITIES | 42,499 | 42,630 | |
Redeemable noncontrolling interest | 0 | 0 | |
Total shareholders’ equity | 66,248 | 66,034 | |
Noncontrolling interest | 0 | 0 | |
TOTAL EQUITY | 66,248 | 66,034 | |
TOTAL LIABILITIES AND EQUITY | 108,747 | 108,664 | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Cash and cash equivalents | 1,147 | 1,120 | |
Trade receivables | 956 | 830 | |
Receivables due from affiliates | 215 | 207 | |
Dividends due from affiliates | 0 | 0 | |
Sold receivables | 530 | 353 | |
Income taxes receivable | 156 | 97 | |
Inventories | 1,109 | 969 | |
Short-term lending due from affiliates | 3,673 | 3,816 | |
Other current assets | 429 | 473 | |
Total current assets | 8,215 | 7,865 | |
Property, plant and equipment, net | 2,666 | 2,543 | |
Goodwill | 33,776 | 33,757 | |
Investments in subsidiaries | 0 | 0 | |
Intangible assets, net | 56,413 | 56,227 | |
Long-term lending due from affiliates | 2,031 | 2,029 | |
Other assets | 1,149 | 1,058 | |
TOTAL ASSETS | 104,250 | 103,479 | |
Commercial paper and other short-term debt | 36 | 12 | |
Current portion of long-term debt | 163 | 166 | |
Short-term lending due to affiliates | 1,704 | 1,598 | |
Trade payables | 1,666 | 1,731 | |
Payables due to affiliates | 743 | 716 | |
Accrued marketing | 425 | 444 | |
Income taxes payable | 1,743 | 1,571 | |
Interest payable | 6 | 15 | |
Dividends due to affiliates | 0 | 0 | |
Other current liabilities | 699 | 621 | |
Total current liabilities | 7,185 | 6,874 | |
Long-term debt | 945 | 891 | |
Long-term borrowings due to affiliates | 2,073 | 1,919 | |
Deferred income taxes | 12,938 | 12,831 | |
Accrued postemployment costs | 233 | 243 | |
Other liabilities | 356 | 301 | |
TOTAL LIABILITIES | 23,730 | 23,059 | |
Redeemable noncontrolling interest | 8 | 6 | |
Total shareholders’ equity | 80,305 | 80,207 | |
Noncontrolling interest | 207 | 207 | |
TOTAL EQUITY | 80,512 | 80,414 | |
TOTAL LIABILITIES AND EQUITY | $ 104,250 | $ 103,479 |
Supplemental Financial Inform85
Supplemental Financial Information Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | $ 413 | $ (615) |
Cash receipts on sold receivables | 436 | 464 |
Capital expenditures | (223) | (368) |
Payments to acquire Cerebos Pacific Limited, net of cash acquired | (215) | 0 |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Additional investments in subsidiaries | 0 | |
Return of capital | 0 | 0 |
Other investing activities, net | 6 | 38 |
Net cash provided by/(used for) investing activities | 4 | 134 |
Proceeds from issuance of commercial paper | 1,524 | 2,324 |
Repayments of commercial paper | (1,006) | (2,068) |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Dividends paid-common stock | (897) | (736) |
Other intercompany capital stock transactions | 0 | 0 |
Other financing activities, net | 3 | (25) |
Net cash provided by/(used for) financing activities | (376) | (505) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (10) | 13 |
Net increase/(decrease) | 31 | (973) |
Balance at beginning of period | 1,769 | 4,255 |
Balance at end of period | 1,800 | 3,282 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | (897) | (736) |
Cash receipts on sold receivables | 0 | 0 |
Capital expenditures | 0 | 0 |
Payments to acquire Cerebos Pacific Limited, net of cash acquired | 0 | |
Net proceeds from/(payments on) intercompany lending activities | (652) | 71 |
Additional investments in subsidiaries | 5 | |
Return of capital | (6) | (7) |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | (653) | 64 |
Proceeds from issuance of commercial paper | 0 | 0 |
Repayments of commercial paper | 0 | 0 |
Net proceeds from/(payments on) intercompany borrowing activities | 652 | (71) |
Dividends paid-common stock | 897 | 736 |
Other intercompany capital stock transactions | 1 | 7 |
Other financing activities, net | 0 | 0 |
Net cash provided by/(used for) financing activities | 1,550 | 672 |
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 |
Balance at end of period | 0 | 0 |
Parent Guarantor | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 897 | 736 |
Cash receipts on sold receivables | 0 | 0 |
Capital expenditures | 0 | 0 |
Payments to acquire Cerebos Pacific Limited, net of cash acquired | 0 | |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Additional investments in subsidiaries | 0 | |
Return of capital | 6 | 7 |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | 6 | 7 |
Proceeds from issuance of commercial paper | 0 | 0 |
Repayments of commercial paper | 0 | 0 |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Dividends paid-common stock | (897) | (736) |
Other intercompany capital stock transactions | 0 | 0 |
Other financing activities, net | (6) | (7) |
Net cash provided by/(used for) financing activities | (903) | (743) |
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 |
Balance at end of period | 0 | 0 |
Subsidiary Issuer | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 447 | (304) |
Cash receipts on sold receivables | 0 | 0 |
Capital expenditures | (101) | (203) |
Payments to acquire Cerebos Pacific Limited, net of cash acquired | (236) | |
Net proceeds from/(payments on) intercompany lending activities | 469 | (4) |
Additional investments in subsidiaries | (5) | |
Return of capital | 0 | 0 |
Other investing activities, net | 6 | 44 |
Net cash provided by/(used for) investing activities | 133 | (163) |
Proceeds from issuance of commercial paper | 1,524 | 2,324 |
Repayments of commercial paper | (1,006) | (2,068) |
Net proceeds from/(payments on) intercompany borrowing activities | (183) | 67 |
Dividends paid-common stock | (897) | (736) |
Other intercompany capital stock transactions | (6) | (7) |
Other financing activities, net | (9) | (21) |
Net cash provided by/(used for) financing activities | (577) | (441) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 |
Net increase/(decrease) | 3 | (908) |
Balance at beginning of period | 644 | 2,869 |
Balance at end of period | 647 | 1,961 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | (34) | (311) |
Cash receipts on sold receivables | 436 | 464 |
Capital expenditures | (122) | (165) |
Payments to acquire Cerebos Pacific Limited, net of cash acquired | 21 | |
Net proceeds from/(payments on) intercompany lending activities | 183 | (67) |
Additional investments in subsidiaries | 0 | |
Return of capital | 0 | 0 |
Other investing activities, net | 0 | (6) |
Net cash provided by/(used for) investing activities | 518 | 226 |
Proceeds from issuance of commercial paper | 0 | 0 |
Repayments of commercial paper | 0 | 0 |
Net proceeds from/(payments on) intercompany borrowing activities | (469) | 4 |
Dividends paid-common stock | 0 | 0 |
Other intercompany capital stock transactions | 5 | 0 |
Other financing activities, net | 18 | 3 |
Net cash provided by/(used for) financing activities | (446) | 7 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (10) | 13 |
Net increase/(decrease) | 28 | (65) |
Balance at beginning of period | 1,125 | 1,386 |
Balance at end of period | $ 1,153 | $ 1,321 |
Supplemental Financial Inform86
Supplemental Financial Information Reconciliation From Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 | Dec. 31, 2016 |
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 1,794 | $ 1,629 | ||
Restricted cash included in other assets (current) | 6 | 140 | ||
Cash, cash equivalents, and restricted cash | 1,800 | 1,769 | $ 3,282 | $ 4,255 |
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 | ||
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 | ||
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 | 647 | 509 | ||
Restricted cash included in other assets (current) | 0 | 135 | ||
Cash, cash equivalents, and restricted cash | 647 | 644 | 1,961 | 2,869 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 1,147 | 1,120 | ||
Restricted cash included in other assets (current) | 6 | 5 | ||
Cash, cash equivalents, and restricted cash | $ 1,153 | $ 1,125 | $ 1,321 | $ 1,386 |