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x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of incorporation or organization)
|
|
46-2078182
(I.R.S. Employer Identification No.)
|
One PPG Place, Pittsburgh, Pennsylvania
(Address of Principal Executive Offices)
|
|
15222
(Zip Code)
|
Large accelerated filer
x
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
Cost of products sold
|
4,063
|
|
|
4,192
|
|
||
Gross profit
|
2,301
|
|
|
2,378
|
|
||
Selling, general and administrative expenses
|
750
|
|
|
865
|
|
||
Operating income
|
1,551
|
|
|
1,513
|
|
||
Interest expense
|
313
|
|
|
249
|
|
||
Other expense/(income), net
|
(12
|
)
|
|
(8
|
)
|
||
Income/(loss) before income taxes
|
1,250
|
|
|
1,272
|
|
||
Provision for/(benefit from) income taxes
|
359
|
|
|
372
|
|
||
Net income/(loss)
|
891
|
|
|
900
|
|
||
Net income/(loss) attributable to noncontrolling interest
|
(2
|
)
|
|
4
|
|
||
Net income/(loss) attributable to common shareholders
|
$
|
893
|
|
|
$
|
896
|
|
Per share data applicable to common shareholders:
|
|
|
|
||||
Basic earnings/(loss)
|
$
|
0.73
|
|
|
$
|
0.74
|
|
Diluted earnings/(loss)
|
0.73
|
|
|
0.73
|
|
||
Dividends declared
|
0.60
|
|
|
0.575
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Net income/(loss)
|
$
|
891
|
|
|
$
|
900
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
307
|
|
|
272
|
|
||
Net deferred gains/(losses) on net investment hedges
|
(51
|
)
|
|
(60
|
)
|
||
Net actuarial gains/(losses) arising during the period
|
(10
|
)
|
|
—
|
|
||
Reclassification of net postemployment benefit losses/(gains)
|
(55
|
)
|
|
(54
|
)
|
||
Net deferred gains/(losses) on cash flow hedges
|
(34
|
)
|
|
(18
|
)
|
||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
20
|
|
|
(22
|
)
|
||
Total other comprehensive income/(loss)
|
177
|
|
|
118
|
|
||
Total comprehensive income/(loss)
|
1,068
|
|
|
1,018
|
|
||
Comprehensive income/(loss) attributable to noncontrolling interest
|
(4
|
)
|
|
11
|
|
||
Comprehensive income/(loss) attributable to common shareholders
|
$
|
1,072
|
|
|
$
|
1,007
|
|
|
April 1, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,242
|
|
|
$
|
4,204
|
|
Trade receivables (net of allowances of $30 at April 1, 2017 and $20 at December 31, 2016)
|
886
|
|
|
769
|
|
||
Sold receivables
|
588
|
|
|
129
|
|
||
Inventories
|
3,151
|
|
|
2,684
|
|
||
Other current assets
|
1,008
|
|
|
967
|
|
||
Total current assets
|
8,875
|
|
|
8,753
|
|
||
Property, plant and equipment, net
|
6,693
|
|
|
6,688
|
|
||
Goodwill
|
44,300
|
|
|
44,125
|
|
||
Intangible assets, net
|
59,330
|
|
|
59,297
|
|
||
Other assets
|
1,604
|
|
|
1,617
|
|
||
TOTAL ASSETS
|
$
|
120,802
|
|
|
$
|
120,480
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Commercial paper and other short-term debt
|
$
|
909
|
|
|
$
|
645
|
|
Current portion of long-term debt
|
2,023
|
|
|
2,046
|
|
||
Trade payables
|
3,936
|
|
|
3,996
|
|
||
Accrued marketing
|
599
|
|
|
749
|
|
||
Accrued postemployment costs
|
157
|
|
|
157
|
|
||
Income taxes payable
|
424
|
|
|
255
|
|
||
Interest payable
|
346
|
|
|
415
|
|
||
Other current liabilities
|
989
|
|
|
1,238
|
|
||
Total current liabilities
|
9,383
|
|
|
9,501
|
|
||
Long-term debt
|
29,748
|
|
|
29,713
|
|
||
Deferred income taxes
|
20,910
|
|
|
20,848
|
|
||
Accrued postemployment costs
|
2,016
|
|
|
2,038
|
|
||
Other liabilities
|
801
|
|
|
806
|
|
||
TOTAL LIABILITIES
|
62,858
|
|
|
62,906
|
|
||
Commitments and Contingencies (Note 13)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value (5,000,000,000 shares authorized; 1,220,191,898 shares issued and 1,217,543,284
shares outstanding at April 1, 2017; 1,218,947,088 shares issued and 1,216,475,740 shares outstanding at December 31, 2016)
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
58,642
|
|
|
58,593
|
|
||
Retained earnings/(deficit)
|
750
|
|
|
588
|
|
||
Accumulated other comprehensive income/(losses)
|
(1,449
|
)
|
|
(1,628
|
)
|
||
Treasury stock, at cost
|
(223
|
)
|
|
(207
|
)
|
||
Total shareholders' equity
|
57,732
|
|
|
57,358
|
|
||
Noncontrolling interest
|
212
|
|
|
216
|
|
||
TOTAL EQUITY
|
57,944
|
|
|
57,574
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
120,802
|
|
|
$
|
120,480
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings/(Deficit)
|
|
Accumulated Other Comprehensive Income/(Losses)
|
|
Treasury Stock
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||
Balance at December 31, 2016
|
$
|
12
|
|
|
$
|
58,593
|
|
|
$
|
588
|
|
|
$
|
(1,628
|
)
|
|
$
|
(207
|
)
|
|
$
|
216
|
|
|
$
|
57,574
|
|
Net income/(loss)
|
—
|
|
|
—
|
|
|
893
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
891
|
|
|||||||
Other comprehensive income/(loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
(2
|
)
|
|
177
|
|
|||||||
Dividends declared-common stock
|
—
|
|
|
—
|
|
|
(731
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(731
|
)
|
|||||||
Exercise of stock options, issuance of other stock awards, and other
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
33
|
|
|||||||
Balance at April 1, 2017
|
$
|
12
|
|
|
$
|
58,642
|
|
|
$
|
750
|
|
|
$
|
(1,449
|
)
|
|
$
|
(223
|
)
|
|
$
|
212
|
|
|
$
|
57,944
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income/(loss)
|
$
|
891
|
|
|
$
|
900
|
|
Adjustments to reconcile net income/(loss) to operating cash flows:
|
|
|
|
|
|||
Depreciation and amortization
|
262
|
|
|
363
|
|
||
Amortization of postretirement benefit plans prior service costs/(credits)
|
(82
|
)
|
|
(50
|
)
|
||
Equity award compensation expense
|
11
|
|
|
13
|
|
||
Deferred income tax provision/(benefit)
|
105
|
|
|
27
|
|
||
Pension contributions
|
(11
|
)
|
|
(169
|
)
|
||
Other items, net
|
16
|
|
|
(111
|
)
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Trade receivables
|
(118
|
)
|
|
(38
|
)
|
||
Sold receivables
|
(458
|
)
|
|
(222
|
)
|
||
Inventories
|
(492
|
)
|
|
(273
|
)
|
||
Accounts payable
|
62
|
|
|
59
|
|
||
Other current assets
|
(67
|
)
|
|
(45
|
)
|
||
Other current liabilities
|
(270
|
)
|
|
(184
|
)
|
||
Net cash provided by/(used for) operating activities
|
(151
|
)
|
|
270
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(368
|
)
|
|
(303
|
)
|
||
Other investing activities, net
|
38
|
|
|
10
|
|
||
Net cash provided by/(used for) investing activities
|
(330
|
)
|
|
(293
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from issuance of commercial paper
|
2,324
|
|
|
—
|
|
||
Repayments of commercial paper
|
(2,068
|
)
|
|
—
|
|
||
Dividends paid-common stock
|
(736
|
)
|
|
(667
|
)
|
||
Other financing activities, net
|
(25
|
)
|
|
40
|
|
||
Net cash provided by/(used for) financing activities
|
(505
|
)
|
|
(627
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
13
|
|
|
44
|
|
||
Cash, cash equivalents, and restricted cash
|
|
|
|
||||
Net increase/(decrease)
|
(973
|
)
|
|
(606
|
)
|
||
Balance at beginning of period
|
4,255
|
|
|
4,912
|
|
||
Balance at end of period
|
$
|
3,282
|
|
|
$
|
4,306
|
|
•
|
Organization costs (
$400 million
) associated with our plans to streamline and simplify our operating structure, resulting in workforce reduction (primarily severance and employee benefit costs).
|
•
|
Footprint costs (
$1.2 billion
) associated with our plans to optimize our production and supply chain network, resulting in workforce reduction and facility closures and consolidations (primarily asset-related costs and severance and employee benefit costs).
|
•
|
Other costs (
$400 million
) incurred as a direct result of integration activities, including other exit costs (lease and contract terminations) and other implementation costs (professional services and other third-party fees).
|
|
Severance and Employee Benefit Costs
|
|
Other Exit Costs
(a)
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
99
|
|
|
$
|
10
|
|
|
$
|
109
|
|
Charges
|
34
|
|
|
9
|
|
|
43
|
|
|||
Cash payments
|
(22
|
)
|
|
(1
|
)
|
|
(23
|
)
|
|||
Non-cash utilization
|
(8
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|||
Balance at April 1, 2017
|
$
|
103
|
|
|
$
|
16
|
|
|
$
|
119
|
|
|
Severance and Employee Benefit Costs
|
|
Other Exit Costs
(a)
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
12
|
|
|
$
|
25
|
|
|
$
|
37
|
|
Charges
|
10
|
|
|
—
|
|
|
10
|
|
|||
Cash payments
|
(12
|
)
|
|
(1
|
)
|
|
(13
|
)
|
|||
Non-cash utilization
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Balance at April 1, 2017
|
$
|
6
|
|
|
$
|
24
|
|
|
$
|
30
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Severance and employee benefit costs - COGS
|
$
|
19
|
|
|
$
|
6
|
|
Severance and employee benefit costs - SG&A
|
25
|
|
|
32
|
|
||
Asset-related costs - COGS
|
75
|
|
|
142
|
|
||
Asset-related costs - SG&A
|
7
|
|
|
14
|
|
||
Other costs - COGS
|
9
|
|
|
33
|
|
||
Other costs - SG&A
|
13
|
|
|
33
|
|
||
|
$
|
148
|
|
|
$
|
260
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
United States
|
$
|
108
|
|
|
$
|
199
|
|
Canada
|
10
|
|
|
18
|
|
||
Europe
|
14
|
|
|
15
|
|
||
Rest of World
|
—
|
|
|
—
|
|
||
General corporate expenses
|
16
|
|
|
28
|
|
||
|
$
|
148
|
|
|
$
|
260
|
|
|
April 1,
2017 |
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
3,242
|
|
|
$
|
4,204
|
|
Restricted cash included in other assets (current)
|
36
|
|
|
42
|
|
||
Restricted cash included in other assets (noncurrent)
|
4
|
|
|
9
|
|
||
Cash, cash equivalents, and restricted cash
|
$
|
3,282
|
|
|
$
|
4,255
|
|
|
April 1, 2017
|
|
December 31, 2016
|
||||
Packaging and ingredients
|
$
|
716
|
|
|
$
|
542
|
|
Work in process
|
493
|
|
|
388
|
|
||
Finished product
|
1,942
|
|
|
1,754
|
|
||
Inventories
|
$
|
3,151
|
|
|
$
|
2,684
|
|
|
United States
|
|
Canada
|
|
Europe
|
|
Rest of World
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
33,696
|
|
|
$
|
4,913
|
|
|
$
|
2,778
|
|
|
$
|
2,738
|
|
|
$
|
44,125
|
|
Translation adjustments
|
—
|
|
|
44
|
|
|
51
|
|
|
80
|
|
|
175
|
|
|||||
Balance at April 1, 2017
|
$
|
33,696
|
|
|
$
|
4,957
|
|
|
$
|
2,829
|
|
|
$
|
2,818
|
|
|
$
|
44,300
|
|
Balance at December 31, 2016
|
$
|
53,307
|
|
Translation adjustments
|
80
|
|
|
Balance at April 1, 2017
|
$
|
53,387
|
|
|
April 1, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Trademarks
|
$
|
2,346
|
|
|
$
|
(199
|
)
|
|
$
|
2,147
|
|
|
$
|
2,337
|
|
|
$
|
(172
|
)
|
|
$
|
2,165
|
|
Customer-related assets
|
4,199
|
|
|
(413
|
)
|
|
3,786
|
|
|
4,184
|
|
|
(369
|
)
|
|
3,815
|
|
||||||
Other
|
13
|
|
|
(3
|
)
|
|
10
|
|
|
13
|
|
|
(3
|
)
|
|
10
|
|
||||||
|
$
|
6,558
|
|
|
$
|
(615
|
)
|
|
$
|
5,943
|
|
|
$
|
6,534
|
|
|
$
|
(544
|
)
|
|
$
|
5,990
|
|
|
Number of Stock Options
|
|
Weighted Average Exercise Price
(per share) |
|||
Outstanding at December 31, 2016
|
20,560,140
|
|
|
$
|
37.39
|
|
Granted
|
1,170,685
|
|
|
91.40
|
|
|
Forfeited
|
(126,206
|
)
|
|
44.78
|
|
|
Exercised
|
(1,126,852
|
)
|
|
34.00
|
|
|
Outstanding at April 1, 2017
|
20,477,767
|
|
|
40.62
|
|
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
(per share)
|
|||
Outstanding at December 31, 2016
|
806,744
|
|
|
$
|
71.95
|
|
Granted
|
1,640,535
|
|
|
84.97
|
|
|
Forfeited
|
(19,395
|
)
|
|
76.65
|
|
|
Vested
|
(117,958
|
)
|
|
72.96
|
|
|
Outstanding at April 1, 2017
|
2,309,926
|
|
|
81.15
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Pre-tax compensation cost
|
$
|
11
|
|
|
$
|
13
|
|
Tax benefit
|
(3
|
)
|
|
(4
|
)
|
||
After-tax compensation cost
|
$
|
8
|
|
|
$
|
9
|
|
|
For the Three Months Ended
|
||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
April 1,
2017 |
|
April 3,
2016 |
||||||||
Service cost
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
6
|
|
Interest cost
|
45
|
|
|
53
|
|
|
16
|
|
|
21
|
|
||||
Expected return on plan assets
|
(65
|
)
|
|
(74
|
)
|
|
(43
|
)
|
|
(46
|
)
|
||||
Settlements
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Special/contractual termination benefits
|
7
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Other
|
2
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
Net pension cost/(benefit)
|
$
|
(8
|
)
|
|
$
|
(24
|
)
|
|
$
|
(26
|
)
|
|
$
|
(19
|
)
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Service cost
|
$
|
2
|
|
|
$
|
4
|
|
Interest cost
|
13
|
|
|
16
|
|
||
Amortization of prior service costs/(credits)
|
(90
|
)
|
|
(82
|
)
|
||
Net postretirement cost/(benefit)
|
$
|
(75
|
)
|
|
$
|
(62
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Net Postemployment Benefit Plan Adjustments
|
|
Net Cash Flow Hedge Adjustments
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
(2,412
|
)
|
|
$
|
772
|
|
|
$
|
12
|
|
|
$
|
(1,628
|
)
|
Foreign currency translation adjustments
|
309
|
|
|
—
|
|
|
—
|
|
|
309
|
|
||||
Net deferred gains/(losses) on net investment hedges
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
||||
Net postemployment benefit gains/(losses) arising during the period
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Reclassification of net postemployment benefit losses/(gains)
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
||||
Net deferred gains/(losses) on cash flow hedges
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||
Total other comprehensive income/(loss)
|
258
|
|
|
(65
|
)
|
|
(14
|
)
|
|
179
|
|
||||
Balance as of April 1, 2017
|
$
|
(2,154
|
)
|
|
$
|
707
|
|
|
$
|
(2
|
)
|
|
$
|
(1,449
|
)
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||||||||||||||||||
|
Before Tax Amount
|
|
Tax
|
|
Net of Tax Amount
|
|
Before Tax Amount
|
|
Tax
|
|
Net of Tax Amount
|
||||||||||||
Foreign currency translation adjustments
|
$
|
309
|
|
|
$
|
—
|
|
|
$
|
309
|
|
|
$
|
265
|
|
|
$
|
—
|
|
|
$
|
265
|
|
Net deferred gains/(losses) on net investment hedges
|
(78
|
)
|
|
27
|
|
|
(51
|
)
|
|
(84
|
)
|
|
24
|
|
|
(60
|
)
|
||||||
Net actuarial gains/(losses) arising during the period
|
(12
|
)
|
|
2
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification of net postemployment benefit losses/(gains)
|
(90
|
)
|
|
35
|
|
|
(55
|
)
|
|
(88
|
)
|
|
34
|
|
|
(54
|
)
|
||||||
Net deferred gains/(losses) on cash flow hedges
|
(39
|
)
|
|
5
|
|
|
(34
|
)
|
|
(28
|
)
|
|
10
|
|
|
(18
|
)
|
||||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
17
|
|
|
3
|
|
|
20
|
|
|
(26
|
)
|
|
4
|
|
|
(22
|
)
|
Accumulated Other Comprehensive Income/(Losses) Component
|
|
Reclassified from Accumulated Other Comprehensive Income/(Losses)
|
|
Affected Line Item in the Statement Where Net Income/(Loss) is Presented
|
||||||
|
|
For the Three Months Ended
|
|
|
||||||
|
|
April 1,
2017 |
|
April 3,
2016 |
|
|
||||
Losses/(gains) on cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Net sales
|
Foreign exchange contracts
|
|
1
|
|
|
(29
|
)
|
|
Cost of products sold
|
||
Foreign exchange contracts
|
|
15
|
|
|
3
|
|
|
Other expense/(income), net
|
||
Interest rate contracts
|
|
1
|
|
|
1
|
|
|
Interest expense
|
||
Losses/(gains) on cash flow hedges before income taxes
|
|
17
|
|
|
(26
|
)
|
|
|
||
Losses/(gains) on cash flow hedges income taxes
|
|
3
|
|
|
4
|
|
|
|
||
Losses/(gains) on cash flow hedges
|
|
$
|
20
|
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
||||
Losses/(gains) on postemployment benefits:
|
|
|
|
|
|
|
||||
Amortization of unrecognized losses/(gains)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(a)
|
Amortization of prior service costs/(credits)
|
|
(90
|
)
|
|
(82
|
)
|
|
(a)
|
||
Settlement and curtailments losses/(gains)
|
|
—
|
|
|
(6
|
)
|
|
(a)
|
||
Losses/(gains) on postemployment benefits before income taxes
|
|
(90
|
)
|
|
(88
|
)
|
|
|
||
Losses/(gains) on postemployment benefits income taxes
|
|
35
|
|
|
34
|
|
|
|
||
Losses/(gains) on postemployment benefits
|
|
$
|
(55
|
)
|
|
$
|
(54
|
)
|
|
|
(a)
|
These components are included in the computation of net periodic postemployment benefit costs. See Note 8,
Postemployment Benefits
, for additional information.
|
|
Notional Amount
|
||||||
|
April 1, 2017
|
|
December 31, 2016
|
||||
Commodity contracts
|
$
|
641
|
|
|
$
|
459
|
|
Foreign exchange contracts
|
3,048
|
|
|
2,997
|
|
||
Cross-currency contracts
|
3,173
|
|
|
3,173
|
|
|
April 1, 2017
|
||||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total Fair Value
|
||||||||||||||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
23
|
|
Cross-currency contracts
|
—
|
|
|
—
|
|
|
549
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
549
|
|
|
40
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity contracts
|
16
|
|
|
39
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
42
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
37
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
1
|
|
||||||||
Cross-currency contracts
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||||||
Total fair value
|
$
|
16
|
|
|
$
|
39
|
|
|
$
|
666
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
682
|
|
|
$
|
106
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||||||||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
13
|
|
Cross-currency contracts
|
—
|
|
|
—
|
|
|
580
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
580
|
|
|
36
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity contracts
|
28
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
7
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
35
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
30
|
|
||||||||
Cross-currency contracts
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||||||
Total fair value
|
$
|
28
|
|
|
$
|
7
|
|
|
$
|
728
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
756
|
|
|
$
|
86
|
|
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
|
•
|
foreign exchange contracts for periods not exceeding the next
14
months and
|
•
|
cross-currency contracts for periods not exceeding the next
three
years.
|
•
|
commodity contracts for periods not exceeding the next
18
months,
|
•
|
foreign exchange contracts for periods not exceeding the next
11
months, and
|
•
|
cross-currency contracts for periods not exceeding the next
two
years.
|
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||||||||||||||||||||||||||
|
Commodity Contracts
|
|
Foreign Exchange
Contracts |
|
Cross-Currency Contracts
|
|
Interest Rate Contracts
|
|
Commodity Contracts
|
|
Foreign Exchange
Contracts |
|
Cross-Currency Contracts
|
|
Interest Rate
Contracts |
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) recognized in other comprehensive income (effective portion)
|
$
|
—
|
|
|
$
|
(39
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) recognized in other comprehensive income (effective portion)
|
—
|
|
|
(4
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
||||||||
Total gains/(losses) recognized in other comprehensive income (effective portion)
|
$
|
—
|
|
|
$
|
(43
|
)
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
(65
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges reclassified to net income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of products sold (effective portion)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
||||||||
Other expense/(income), net
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
27
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) on derivatives recognized in cost of products sold
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gains/(losses) on derivatives recognized in other expense/(income), net
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
(7
|
)
|
|
—
|
|
||||||||
|
(37
|
)
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
(18
|
)
|
|
(75
|
)
|
|
(7
|
)
|
|
—
|
|
||||||||
Total gains/(losses) recognized in statements of income
|
$
|
(37
|
)
|
|
$
|
(14
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(18
|
)
|
|
$
|
(48
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
•
|
the official exchange rate of BsF
10
per U.S. dollar available through the Sistema de Divisa Protegida (“DIPRO”), which is available for purchases and sales of essential items, including food products, and
|
•
|
an alternative exchange rate available through the Sistema de Divisa Complementaria (“DICOM”), which is available for all transactions not covered by DIPRO and is a free-floating exchange rate format.
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
|
(in millions, except per share amounts)
|
||||||
Basic Earnings Per Common Share:
|
|
|
|
||||
Net income/(loss) attributable to common shareholders
|
$
|
893
|
|
|
$
|
896
|
|
Weighted average shares of common stock outstanding
|
1,217
|
|
|
1,215
|
|
||
Net earnings/(loss)
|
$
|
0.73
|
|
|
$
|
0.74
|
|
Diluted Earnings Per Common Share:
|
|
|
|
||||
Net income/(loss) attributable to common shareholders
|
$
|
893
|
|
|
$
|
896
|
|
Weighted average shares of common stock outstanding
|
1,217
|
|
|
1,215
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Equity awards
|
12
|
|
|
10
|
|
||
Weighted average shares of common stock outstanding, including dilutive effect
|
1,229
|
|
|
1,225
|
|
||
Net earnings/(loss)
|
$
|
0.73
|
|
|
$
|
0.73
|
|
•
|
our Russia business moved from the Rest of World segment to the Europe segment and
|
•
|
management of our Global Procurement Office moved from one of our European subsidiaries to our global headquarters, which resulted in moving the related costs from the Europe segment to general corporate expenses.
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Net sales:
|
|
|
|
||||
United States
|
$
|
4,552
|
|
|
$
|
4,715
|
|
Canada
|
443
|
|
|
504
|
|
||
Europe
|
543
|
|
|
583
|
|
||
Rest of World
|
826
|
|
|
768
|
|
||
Total net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Segment Adjusted EBITDA:
|
|
|
|
||||
United States
|
$
|
1,472
|
|
|
$
|
1,493
|
|
Canada
|
126
|
|
|
151
|
|
||
Europe
|
170
|
|
|
180
|
|
||
Rest of World
|
146
|
|
|
166
|
|
||
General corporate expenses
|
(29
|
)
|
|
(39
|
)
|
||
Depreciation and amortization (excluding integration and restructuring expenses)
|
(132
|
)
|
|
(161
|
)
|
||
Integration and restructuring expenses
|
(148
|
)
|
|
(260
|
)
|
||
Merger costs
|
—
|
|
|
(15
|
)
|
||
Unrealized gains/(losses) on commodity hedges
|
(42
|
)
|
|
8
|
|
||
Nonmonetary currency devaluation
|
—
|
|
|
(1
|
)
|
||
Equity award compensation expense (excluding integration and restructuring expenses)
|
(12
|
)
|
|
(9
|
)
|
||
Operating income
|
1,551
|
|
|
1,513
|
|
||
Interest expense
|
313
|
|
|
249
|
|
||
Other expense/(income), net
|
(12
|
)
|
|
(8
|
)
|
||
Income/(loss) before income taxes
|
$
|
1,250
|
|
|
$
|
1,272
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Condiments and sauces
|
$
|
1,513
|
|
|
$
|
1,564
|
|
Cheese and dairy
|
1,299
|
|
|
1,366
|
|
||
Ambient meals
|
583
|
|
|
590
|
|
||
Frozen and chilled meals
|
653
|
|
|
627
|
|
||
Meats and seafood
|
660
|
|
|
696
|
|
||
Refreshment beverages
|
372
|
|
|
408
|
|
||
Coffee
|
350
|
|
|
383
|
|
||
Infant and nutrition
|
188
|
|
|
190
|
|
||
Desserts, toppings and baking
|
196
|
|
|
210
|
|
||
Nuts and salted snacks
|
232
|
|
|
260
|
|
||
Other
|
318
|
|
|
276
|
|
||
Total net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
4,360
|
|
|
$
|
2,166
|
|
|
$
|
(162
|
)
|
|
$
|
6,364
|
|
Cost of products sold
|
—
|
|
|
2,714
|
|
|
1,511
|
|
|
(162
|
)
|
|
4,063
|
|
|||||
Gross profit
|
—
|
|
|
1,646
|
|
|
655
|
|
|
—
|
|
|
2,301
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
184
|
|
|
566
|
|
|
—
|
|
|
750
|
|
|||||
Intercompany service fees and other recharges
|
—
|
|
|
1,108
|
|
|
(1,108
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
—
|
|
|
354
|
|
|
1,197
|
|
|
—
|
|
|
1,551
|
|
|||||
Interest expense
|
—
|
|
|
303
|
|
|
10
|
|
|
—
|
|
|
313
|
|
|||||
Other expense/(income), net
|
—
|
|
|
17
|
|
|
(29
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Income/(loss) before income taxes
|
—
|
|
|
34
|
|
|
1,216
|
|
|
—
|
|
|
1,250
|
|
|||||
Provision for/(benefit from) income taxes
|
—
|
|
|
(12
|
)
|
|
371
|
|
|
—
|
|
|
359
|
|
|||||
Equity in earnings of subsidiaries
|
893
|
|
|
847
|
|
|
—
|
|
|
(1,740
|
)
|
|
—
|
|
|||||
Net income/(loss)
|
893
|
|
|
893
|
|
|
845
|
|
|
(1,740
|
)
|
|
891
|
|
|||||
Net income/(loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income/(loss) excluding noncontrolling interest
|
$
|
893
|
|
|
$
|
893
|
|
|
$
|
847
|
|
|
$
|
(1,740
|
)
|
|
$
|
893
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income/(loss) excluding noncontrolling interest
|
$
|
1,072
|
|
|
$
|
1,072
|
|
|
$
|
1,842
|
|
|
$
|
(2,914
|
)
|
|
$
|
1,072
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
4,471
|
|
|
$
|
2,241
|
|
|
$
|
(142
|
)
|
|
$
|
6,570
|
|
Cost of products sold
|
—
|
|
|
2,832
|
|
|
1,502
|
|
|
(142
|
)
|
|
4,192
|
|
|||||
Gross profit
|
—
|
|
|
1,639
|
|
|
739
|
|
|
—
|
|
|
2,378
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
277
|
|
|
588
|
|
|
—
|
|
|
865
|
|
|||||
Intercompany service fees and other recharges
|
—
|
|
|
1,214
|
|
|
(1,214
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
—
|
|
|
148
|
|
|
1,365
|
|
|
—
|
|
|
1,513
|
|
|||||
Interest expense
|
—
|
|
|
235
|
|
|
14
|
|
|
—
|
|
|
249
|
|
|||||
Other expense/(income), net
|
—
|
|
|
31
|
|
|
(39
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Income/(loss) before income taxes
|
—
|
|
|
(118
|
)
|
|
1,390
|
|
|
—
|
|
|
1,272
|
|
|||||
Provision for/(benefit from) income taxes
|
—
|
|
|
(58
|
)
|
|
430
|
|
|
—
|
|
|
372
|
|
|||||
Equity in earnings of subsidiaries
|
896
|
|
|
956
|
|
|
—
|
|
|
(1,852
|
)
|
|
—
|
|
|||||
Net income/(loss)
|
896
|
|
|
896
|
|
|
960
|
|
|
(1,852
|
)
|
|
900
|
|
|||||
Net income/(loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Net income/(loss) excluding noncontrolling interest
|
$
|
896
|
|
|
$
|
896
|
|
|
$
|
956
|
|
|
$
|
(1,852
|
)
|
|
$
|
896
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income/(loss) excluding noncontrolling interest
|
$
|
1,007
|
|
|
$
|
1,007
|
|
|
$
|
1,149
|
|
|
$
|
(2,156
|
)
|
|
$
|
1,007
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,929
|
|
|
$
|
1,313
|
|
|
$
|
—
|
|
|
$
|
3,242
|
|
Trade receivables
|
—
|
|
|
30
|
|
|
856
|
|
|
—
|
|
|
886
|
|
|||||
Receivables due from affiliates
|
—
|
|
|
808
|
|
|
220
|
|
|
(1,028
|
)
|
|
—
|
|
|||||
Dividends due from affiliates
|
32
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|||||
Sold receivables
|
—
|
|
|
—
|
|
|
588
|
|
|
—
|
|
|
588
|
|
|||||
Inventories
|
—
|
|
|
2,074
|
|
|
1,077
|
|
|
—
|
|
|
3,151
|
|
|||||
Short-term lending due from affiliates
|
—
|
|
|
1,792
|
|
|
3,062
|
|
|
(4,854
|
)
|
|
—
|
|
|||||
Other current assets
|
—
|
|
|
2,366
|
|
|
227
|
|
|
(1,585
|
)
|
|
1,008
|
|
|||||
Total current assets
|
32
|
|
|
8,999
|
|
|
7,343
|
|
|
(7,499
|
)
|
|
8,875
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
4,424
|
|
|
2,269
|
|
|
—
|
|
|
6,693
|
|
|||||
Goodwill
|
—
|
|
|
11,067
|
|
|
33,233
|
|
|
—
|
|
|
44,300
|
|
|||||
Investments in subsidiaries
|
57,732
|
|
|
71,474
|
|
|
—
|
|
|
(129,206
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,329
|
|
|
56,001
|
|
|
—
|
|
|
59,330
|
|
|||||
Long-term lending due from affiliates
|
—
|
|
|
1,700
|
|
|
2,000
|
|
|
(3,700
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
602
|
|
|
1,002
|
|
|
—
|
|
|
1,604
|
|
|||||
TOTAL ASSETS
|
$
|
57,764
|
|
|
$
|
101,595
|
|
|
$
|
101,848
|
|
|
$
|
(140,405
|
)
|
|
$
|
120,802
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper and other short-term debt
|
$
|
—
|
|
|
$
|
900
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
909
|
|
Current portion of long-term debt
|
—
|
|
|
2,012
|
|
|
11
|
|
|
—
|
|
|
2,023
|
|
|||||
Short-term lending due to affiliates
|
—
|
|
|
3,062
|
|
|
1,792
|
|
|
(4,854
|
)
|
|
—
|
|
|||||
Trade payables
|
—
|
|
|
2,366
|
|
|
1,570
|
|
|
—
|
|
|
3,936
|
|
|||||
Payables due to affiliates
|
—
|
|
|
220
|
|
|
808
|
|
|
(1,028
|
)
|
|
—
|
|
|||||
Accrued marketing
|
—
|
|
|
165
|
|
|
434
|
|
|
—
|
|
|
599
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
144
|
|
|
13
|
|
|
—
|
|
|
157
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
2,009
|
|
|
(1,585
|
)
|
|
424
|
|
|||||
Interest payable
|
—
|
|
|
340
|
|
|
6
|
|
|
—
|
|
|
346
|
|
|||||
Dividends due to affiliates
|
—
|
|
|
32
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|||||
Other current liabilities
|
32
|
|
|
378
|
|
|
579
|
|
|
—
|
|
|
989
|
|
|||||
Total current liabilities
|
32
|
|
|
9,619
|
|
|
7,231
|
|
|
(7,499
|
)
|
|
9,383
|
|
|||||
Long-term debt
|
—
|
|
|
28,762
|
|
|
986
|
|
|
—
|
|
|
29,748
|
|
|||||
Long-term borrowings due to affiliates
|
—
|
|
|
2,000
|
|
|
1,917
|
|
|
(3,917
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
1,367
|
|
|
19,543
|
|
|
—
|
|
|
20,910
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
1,728
|
|
|
288
|
|
|
—
|
|
|
2,016
|
|
|||||
Other liabilities
|
—
|
|
|
387
|
|
|
414
|
|
|
—
|
|
|
801
|
|
|||||
TOTAL LIABILITIES
|
32
|
|
|
43,863
|
|
|
30,379
|
|
|
(11,416
|
)
|
|
62,858
|
|
|||||
Total shareholders’ equity
|
57,732
|
|
|
57,732
|
|
|
71,257
|
|
|
(128,989
|
)
|
|
57,732
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
212
|
|
|
—
|
|
|
212
|
|
|||||
TOTAL EQUITY
|
57,732
|
|
|
57,732
|
|
|
71,469
|
|
|
(128,989
|
)
|
|
57,944
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
57,764
|
|
|
$
|
101,595
|
|
|
$
|
101,848
|
|
|
$
|
(140,405
|
)
|
|
$
|
120,802
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,830
|
|
|
$
|
1,374
|
|
|
$
|
—
|
|
|
$
|
4,204
|
|
Trade receivables
|
—
|
|
|
12
|
|
|
757
|
|
|
—
|
|
|
769
|
|
|||||
Receivables due from affiliates
|
—
|
|
|
712
|
|
|
111
|
|
|
(823
|
)
|
|
—
|
|
|||||
Dividends due from affiliates
|
39
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|||||
Sold receivables
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Inventories
|
—
|
|
|
1,759
|
|
|
925
|
|
|
—
|
|
|
2,684
|
|
|||||
Short-term lending due from affiliates
|
—
|
|
|
1,722
|
|
|
2,956
|
|
|
(4,678
|
)
|
|
—
|
|
|||||
Other current assets
|
—
|
|
|
2,229
|
|
|
447
|
|
|
(1,709
|
)
|
|
967
|
|
|||||
Total current assets
|
39
|
|
|
9,264
|
|
|
6,699
|
|
|
(7,249
|
)
|
|
8,753
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
4,447
|
|
|
2,241
|
|
|
—
|
|
|
6,688
|
|
|||||
Goodwill
|
—
|
|
|
11,067
|
|
|
33,058
|
|
|
—
|
|
|
44,125
|
|
|||||
Investments in subsidiaries
|
57,358
|
|
|
70,877
|
|
|
—
|
|
|
(128,235
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,364
|
|
|
55,933
|
|
|
—
|
|
|
59,297
|
|
|||||
Long-term lending due from affiliates
|
—
|
|
|
1,700
|
|
|
2,000
|
|
|
(3,700
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
501
|
|
|
1,116
|
|
|
—
|
|
|
1,617
|
|
|||||
TOTAL ASSETS
|
$
|
57,397
|
|
|
$
|
101,220
|
|
|
$
|
101,047
|
|
|
$
|
(139,184
|
)
|
|
$
|
120,480
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper and other short-term debt
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
645
|
|
Current portion of long-term debt
|
—
|
|
|
2,032
|
|
|
14
|
|
|
—
|
|
|
2,046
|
|
|||||
Short-term lending due to affiliates
|
—
|
|
|
2,956
|
|
|
1,722
|
|
|
(4,678
|
)
|
|
—
|
|
|||||
Trade payables
|
—
|
|
|
2,376
|
|
|
1,620
|
|
|
—
|
|
|
3,996
|
|
|||||
Payables due to affiliates
|
—
|
|
|
111
|
|
|
712
|
|
|
(823
|
)
|
|
—
|
|
|||||
Accrued marketing
|
—
|
|
|
277
|
|
|
472
|
|
|
—
|
|
|
749
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
144
|
|
|
13
|
|
|
—
|
|
|
157
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
1,964
|
|
|
(1,709
|
)
|
|
255
|
|
|||||
Interest payable
|
—
|
|
|
401
|
|
|
14
|
|
|
—
|
|
|
415
|
|
|||||
Dividends due to affiliates
|
—
|
|
|
39
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|||||
Other current liabilities
|
39
|
|
|
588
|
|
|
611
|
|
|
—
|
|
|
1,238
|
|
|||||
Total current liabilities
|
39
|
|
|
9,566
|
|
|
7,145
|
|
|
(7,249
|
)
|
|
9,501
|
|
|||||
Long-term debt
|
—
|
|
|
28,736
|
|
|
977
|
|
|
—
|
|
|
29,713
|
|
|||||
Long-term borrowings due to affiliates
|
—
|
|
|
2,000
|
|
|
1,902
|
|
|
(3,902
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
1,382
|
|
|
19,466
|
|
|
—
|
|
|
20,848
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
1,754
|
|
|
284
|
|
|
—
|
|
|
2,038
|
|
|||||
Other liabilities
|
—
|
|
|
424
|
|
|
382
|
|
|
—
|
|
|
806
|
|
|||||
TOTAL LIABILITIES
|
39
|
|
|
43,862
|
|
|
30,156
|
|
|
(11,151
|
)
|
|
62,906
|
|
|||||
Total shareholders’ equity
|
57,358
|
|
|
57,358
|
|
|
70,675
|
|
|
(128,033
|
)
|
|
57,358
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
216
|
|
|||||
TOTAL EQUITY
|
57,358
|
|
|
57,358
|
|
|
70,891
|
|
|
(128,033
|
)
|
|
57,574
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
57,397
|
|
|
$
|
101,220
|
|
|
$
|
101,047
|
|
|
$
|
(139,184
|
)
|
|
$
|
120,480
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by/(used for) operating activities
|
$
|
736
|
|
|
$
|
(304
|
)
|
|
$
|
153
|
|
|
$
|
(736
|
)
|
|
$
|
(151
|
)
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
)
|
|
(238
|
)
|
|
64
|
|
|
(330
|
)
|
|||||
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
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by/(used for) operating activities
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
270
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(242
|
)
|
|
(61
|
)
|
|
—
|
|
|
(303
|
)
|
|||||
Net proceeds from/(payments on) intercompany lending activities
|
—
|
|
|
423
|
|
|
314
|
|
|
(737
|
)
|
|
—
|
|
|||||
Return of capital
|
667
|
|
|
—
|
|
|
—
|
|
|
(667
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
13
|
|
|
(3
|
)
|
|
—
|
|
|
10
|
|
|||||
Net cash provided by/(used for) investing activities
|
667
|
|
|
194
|
|
|
250
|
|
|
(1,404
|
)
|
|
(293
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from/(payments on) intercompany borrowing activities
|
—
|
|
|
(314
|
)
|
|
(423
|
)
|
|
737
|
|
|
—
|
|
|||||
Dividends paid-common stock
|
(667
|
)
|
|
(667
|
)
|
|
—
|
|
|
667
|
|
|
(667
|
)
|
|||||
Other financing activities, net
|
—
|
|
|
25
|
|
|
15
|
|
|
—
|
|
|
40
|
|
|||||
Net cash provided by/(used for) financing activities
|
(667
|
)
|
|
(956
|
)
|
|
(408
|
)
|
|
1,404
|
|
|
(627
|
)
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
|||||
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase/(decrease)
|
—
|
|
|
(596
|
)
|
|
(10
|
)
|
|
—
|
|
|
(606
|
)
|
|||||
Balance at beginning of period
|
—
|
|
|
3,253
|
|
|
1,659
|
|
|
—
|
|
|
4,912
|
|
|||||
Balance at end of period
|
$
|
—
|
|
|
$
|
2,657
|
|
|
$
|
1,649
|
|
|
$
|
—
|
|
|
$
|
4,306
|
|
|
April 1, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,929
|
|
|
$
|
1,313
|
|
|
$
|
—
|
|
|
$
|
3,242
|
|
Restricted cash included in other assets (current)
|
—
|
|
|
32
|
|
|
4
|
|
|
—
|
|
|
36
|
|
|||||
Restricted cash included in other assets (noncurrent)
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Cash, cash equivalents, and restricted cash
|
$
|
—
|
|
|
$
|
1,961
|
|
|
$
|
1,321
|
|
|
$
|
—
|
|
|
$
|
3,282
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,830
|
|
|
$
|
1,374
|
|
|
$
|
—
|
|
|
$
|
4,204
|
|
Restricted cash included in other assets (current)
|
—
|
|
|
39
|
|
|
3
|
|
|
—
|
|
|
42
|
|
|||||
Restricted cash included in other assets (noncurrent)
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Cash, cash equivalents, and restricted cash
|
$
|
—
|
|
|
$
|
2,869
|
|
|
$
|
1,386
|
|
|
$
|
—
|
|
|
$
|
4,255
|
|
•
|
our Russia business moved from the Rest of World segment to the Europe segment and
|
•
|
management of our Global Procurement Office moved from one of our European subsidiaries to our global headquarters, which resulted in moving the related costs from the Europe segment to general corporate expenses.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions, except per share data)
|
|
|
|||||||
Net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
|
(3.1
|
)%
|
Operating income
|
1,551
|
|
|
1,513
|
|
|
2.5
|
%
|
||
Net income/(loss) attributable to common shareholders
|
893
|
|
|
896
|
|
|
(0.3
|
)%
|
||
Diluted earnings/(loss) per share
|
0.73
|
|
|
0.73
|
|
|
—
|
%
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions)
|
|
|
|||||||
Net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
|
(3.1
|
)%
|
Organic Net Sales
(a)
|
6,379
|
|
|
6,557
|
|
|
(2.7
|
)%
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions, except per share data)
|
|
|
|||||||
Operating income
|
$
|
1,551
|
|
|
$
|
1,513
|
|
|
2.5
|
%
|
Net income/(loss) attributable to common shareholders
|
893
|
|
|
896
|
|
|
(0.3
|
)%
|
||
Adjusted EBITDA
(a)
|
1,885
|
|
|
1,951
|
|
|
(3.4
|
)%
|
(a)
|
Adjusted EBITDA is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
•
|
Interest expense increased to
$313 million
for the
three months
ended
April 1, 2017
, compared to
$249 million
in the prior period. This increase was primarily due to the issuance of new long-term debt in conjunction with the redemption of our Series A Preferred Stock during the second quarter of 2016, and borrowings under our commercial paper program, which began in the second quarter of 2016.
|
•
|
The effective tax rate decreased to
28.7%
for the
three months
ended
April 1, 2017
, compared to
29.2%
in the prior period
. The decrease in our effective tax rate was driven by the favorable impact of net discrete items, primarily related to reversals of uncertain tax position reserves in foreign jurisdictions. The favorable impact of current year discrete items was partially offset by the unfavorable impact of a higher percentage of U.S. income reflected in our estimated full year effective tax rate for 2017 compared to 2016.
|
•
|
Canada Segment Adjusted EBITDA decreased primarily due to volume/mix declines, partially offset by Integration Program savings and the favorable impact of foreign currency (2.2 pp).
|
•
|
United States Segment Adjusted EBITDA decreased primarily due to volume/mix declines and unfavorable key commodity costs (which we define as dairy, meat, coffee, and nuts) primarily coffee and meats, partially offset by Integration Program savings and higher pricing in cheese.
|
•
|
Rest of World Segment Adjusted EBITDA decreased primarily due to increased commercial investments, higher input costs in local currency, and the unfavorable impact of foreign currency (2.7 pp), which were partially offset by net sales growth.
|
•
|
Europe Segment Adjusted EBITDA decreased primarily due to higher input costs in local currency and the unfavorable impact of foreign currency (10.2 pp), which were partially offset by productivity savings.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions, except per share data)
|
|
|
|||||||
Diluted EPS
|
$
|
0.73
|
|
|
$
|
0.73
|
|
|
—
|
%
|
Adjusted EPS
(a)
|
0.84
|
|
|
0.73
|
|
|
15.1
|
%
|
(a)
|
Adjusted EPS is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
|||||||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
$ Change
|
|
% Change
|
|||||||
Diluted EPS
|
$
|
0.73
|
|
|
$
|
0.73
|
|
|
$
|
—
|
|
|
—
|
%
|
Integration and restructuring expenses
|
0.08
|
|
|
0.14
|
|
|
(0.06
|
)
|
|
|
||||
Merger costs
|
—
|
|
|
0.01
|
|
|
(0.01
|
)
|
|
|
||||
Unrealized losses/(gains) on commodity hedges
|
0.02
|
|
|
—
|
|
|
0.02
|
|
|
|
||||
Nonmonetary currency devaluation
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Preferred dividend adjustment
|
—
|
|
|
(0.15
|
)
|
|
0.15
|
|
|
|
||||
Adjusted EPS
(a)
|
$
|
0.84
|
|
|
$
|
0.73
|
|
|
$
|
0.11
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Key drivers of change in Adjusted EPS:
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
$
|
(0.02
|
)
|
|
|
|||||
Change in preferred dividends
|
|
|
|
|
0.15
|
|
|
|
||||||
Change in interest expense
|
|
|
|
|
(0.04
|
)
|
|
|
||||||
Change in other expense/(income), net
|
|
|
|
|
0.01
|
|
|
|
||||||
Change in effective tax rate and other
|
|
|
|
|
0.01
|
|
|
|
||||||
|
|
|
|
|
$
|
0.11
|
|
|
|
(a)
|
Adjusted EPS is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
|
(in millions)
|
||||||
Net sales:
|
|
|
|
||||
United States
|
$
|
4,552
|
|
|
$
|
4,715
|
|
Canada
|
443
|
|
|
504
|
|
||
Europe
|
543
|
|
|
583
|
|
||
Rest of World
|
826
|
|
|
768
|
|
||
Total net sales
|
$
|
6,364
|
|
|
$
|
6,570
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
|
(in millions)
|
||||||
Organic Net Sales
(a)
:
|
|
|
|
||||
United States
|
$
|
4,552
|
|
|
$
|
4,715
|
|
Canada
|
429
|
|
|
504
|
|
||
Europe
|
582
|
|
|
583
|
|
||
Rest of World
|
816
|
|
|
755
|
|
||
Total Organic Net Sales
|
$
|
6,379
|
|
|
$
|
6,557
|
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
Net Sales
|
|
Impact of Currency
|
|
Organic Net Sales
|
|
Price
|
|
Volume/Mix
|
|||||
Three Months Ended April 1, 2017 compared to
Three Months Ended April 3, 2016
|
|
|
|
|
|
|
|
|
|
|||||
United States
|
(3.5
|
)%
|
|
0.0
|
pp
|
|
(3.5
|
)%
|
|
0.7
|
pp
|
|
(4.2
|
) pp
|
Canada
|
(12.2
|
)%
|
|
2.7
|
pp
|
|
(14.9
|
)%
|
|
(1.0
|
) pp
|
|
(13.9
|
) pp
|
Europe
|
(6.8
|
)%
|
|
(6.6
|
) pp
|
|
(0.2
|
)%
|
|
(0.6
|
) pp
|
|
0.4
|
pp
|
Rest of World
|
7.5
|
%
|
|
(0.6
|
) pp
|
|
8.1
|
%
|
|
5.1
|
pp
|
|
3.0
|
pp
|
Kraft Heinz
|
(3.1
|
)%
|
|
(0.4
|
) pp
|
|
(2.7
|
)%
|
|
1.0
|
pp
|
|
(3.7
|
) pp
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
|
(in millions)
|
||||||
Segment Adjusted EBITDA:
|
|
|
|
||||
United States
|
$
|
1,472
|
|
|
$
|
1,493
|
|
Canada
|
126
|
|
|
151
|
|
||
Europe
|
170
|
|
|
180
|
|
||
Rest of World
|
146
|
|
|
166
|
|
||
General corporate expenses
|
(29
|
)
|
|
(39
|
)
|
||
Depreciation and amortization (excluding integration and restructuring expenses)
|
(132
|
)
|
|
(161
|
)
|
||
Integration and restructuring expenses
|
(148
|
)
|
|
(260
|
)
|
||
Merger costs
|
—
|
|
|
(15
|
)
|
||
Unrealized gains/(losses) on commodity hedges
|
(42
|
)
|
|
8
|
|
||
Nonmonetary currency devaluation
|
—
|
|
|
(1
|
)
|
||
Equity award compensation expense (excluding integration and restructuring expenses)
|
(12
|
)
|
|
(9
|
)
|
||
Operating income
|
1,551
|
|
|
1,513
|
|
||
Interest expense
|
313
|
|
|
249
|
|
||
Other expense/(income), net
|
(12
|
)
|
|
(8
|
)
|
||
Income/(loss) before income taxes
|
$
|
1,250
|
|
|
$
|
1,272
|
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions)
|
|
|
|||||||
Net sales
|
$
|
4,552
|
|
|
$
|
4,715
|
|
|
(3.5
|
)%
|
Organic Net Sales
(a)
|
4,552
|
|
|
4,715
|
|
|
(3.5
|
)%
|
||
Segment Adjusted EBITDA
|
1,472
|
|
|
1,493
|
|
|
(1.4
|
)%
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions)
|
|
|
|||||||
Net sales
|
$
|
443
|
|
|
$
|
504
|
|
|
(12.2
|
)%
|
Organic Net Sales
(a)
|
429
|
|
|
504
|
|
|
(14.9
|
)%
|
||
Segment Adjusted EBITDA
|
126
|
|
|
151
|
|
|
(16.6
|
)%
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions)
|
|
|
|||||||
Net sales
|
$
|
543
|
|
|
$
|
583
|
|
|
(6.8
|
)%
|
Organic Net Sales
(a)
|
582
|
|
|
583
|
|
|
(0.2
|
)%
|
||
Segment Adjusted EBITDA
|
170
|
|
|
180
|
|
|
(5.6
|
)%
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
For the Three Months Ended
|
|||||||||
|
April 1,
2017 |
|
April 3,
2016 |
|
% Change
|
|||||
|
(in millions)
|
|
|
|||||||
Net sales
|
$
|
826
|
|
|
$
|
768
|
|
|
7.5
|
%
|
Organic Net Sales
(a)
|
816
|
|
|
755
|
|
|
8.1
|
%
|
||
Segment Adjusted EBITDA
|
146
|
|
|
166
|
|
|
(11.8
|
)%
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
Net Sales
|
|
Impact of Currency
|
|
Organic Net Sales
|
|
Price
|
|
Volume/Mix
|
||||||
Three Months Ended April 1, 2017
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
4,552
|
|
|
$
|
—
|
|
|
$
|
4,552
|
|
|
|
|
|
Canada
|
443
|
|
|
14
|
|
|
429
|
|
|
|
|
|
|||
Europe
|
543
|
|
|
(39
|
)
|
|
582
|
|
|
|
|
|
|||
Rest of World
|
826
|
|
|
10
|
|
|
816
|
|
|
|
|
|
|||
|
$
|
6,364
|
|
|
$
|
(15
|
)
|
|
$
|
6,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended April 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
4,715
|
|
|
$
|
—
|
|
|
$
|
4,715
|
|
|
|
|
|
Canada
|
504
|
|
|
—
|
|
|
504
|
|
|
|
|
|
|||
Europe
|
583
|
|
|
—
|
|
|
583
|
|
|
|
|
|
|||
Rest of World
|
768
|
|
|
13
|
|
|
755
|
|
|
|
|
|
|||
|
$
|
6,570
|
|
|
$
|
13
|
|
|
$
|
6,557
|
|
|
|
|
|
Year-over-year growth rates
|
|
|
|
|
|
|
|
|
|
|||||
United States
|
(3.5
|
)%
|
|
0.0
|
pp
|
|
(3.5
|
)%
|
|
0.7
|
pp
|
|
(4.2
|
) pp
|
Canada
|
(12.2
|
)%
|
|
2.7
|
pp
|
|
(14.9
|
)%
|
|
(1.0
|
) pp
|
|
(13.9
|
) pp
|
Europe
|
(6.8
|
)%
|
|
(6.6
|
) pp
|
|
(0.2
|
)%
|
|
(0.6
|
) pp
|
|
0.4
|
pp
|
Rest of World
|
7.5
|
%
|
|
(0.6
|
) pp
|
|
8.1
|
%
|
|
5.1
|
pp
|
|
3.0
|
pp
|
Kraft Heinz
|
(3.1
|
)%
|
|
(0.4
|
) pp
|
|
(2.7
|
)%
|
|
1.0
|
pp
|
|
(3.7
|
) pp
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Net income/(loss)
|
$
|
891
|
|
|
$
|
900
|
|
Interest expense
|
313
|
|
|
249
|
|
||
Other expense/(income), net
|
(12
|
)
|
|
(8
|
)
|
||
Provision for/(benefit from) income taxes
|
359
|
|
|
372
|
|
||
Operating income
|
1,551
|
|
|
1,513
|
|
||
Depreciation and amortization (excluding integration and restructuring expenses)
|
132
|
|
|
161
|
|
||
Integration and restructuring expenses
|
148
|
|
|
260
|
|
||
Merger costs
|
—
|
|
|
15
|
|
||
Unrealized losses/(gains) on commodity hedges
|
42
|
|
|
(8
|
)
|
||
Nonmonetary currency devaluation
|
—
|
|
|
1
|
|
||
Equity award compensation expense (excluding integration and restructuring expenses)
|
12
|
|
|
9
|
|
||
Adjusted EBITDA
|
$
|
1,885
|
|
|
$
|
1,951
|
|
|
For the Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 3,
2016 |
||||
Diluted EPS
|
$
|
0.73
|
|
|
$
|
0.73
|
|
Integration and restructuring expenses
(a)(b)
|
0.08
|
|
|
0.14
|
|
||
Merger costs
(a)(b)
|
—
|
|
|
0.01
|
|
||
Unrealized losses/(gains) on commodity hedges
(a)(b)
|
0.02
|
|
|
—
|
|
||
Nonmonetary currency devaluation
(a)(c)
|
0.01
|
|
|
—
|
|
||
Preferred dividend adjustment
(d)
|
—
|
|
|
(0.15
|
)
|
||
Adjusted EPS
|
$
|
0.84
|
|
|
$
|
0.73
|
|
(a)
|
Income tax expense associated with these items is based on applicable jurisdictional tax rates and deductibility assessment of individual items.
|
(b)
|
Refer to the reconciliation of net income/(loss) to Adjusted EBITDA for the related gross expenses.
|
(c)
|
Nonmonetary currency devaluation includes the following gross expenses/(income):
|
•
|
Expenses recorded in cost of products sold of were $1 million for the three months ended April 3, 2016 (there were no such expenses for the three months ended April 1, 2017) and
|
•
|
Expenses recorded in other expense/(income), net, were $8 million for the three months ended April 1, 2017 (there were no such expenses for the three months ended April 3, 2016).
|
(d)
|
For Adjusted EPS, we present the impact of the Series A Preferred Stock dividend payments on an accrual basis. Accordingly, we included an adjustment to EPS to include $180 million of Series A Preferred Stock dividends in the three months ended April 3, 2016 (to reflect the March 7, 2016 Series A Preferred Stock dividend that was paid in December 2015).
|
|
|
Total Number
of Shares
(a)
|
|
Average Price
Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program
|
|
Dollar Value of Shares that May Yet be Purchased Under the Plan or Program
|
||||||
1/1/2017 - 2/4/2017
|
|
111,031
|
|
|
$
|
87.81
|
|
|
—
|
|
|
|
||
2/5/2017 - 3/4/2017
|
|
386,000
|
|
|
91.26
|
|
|
—
|
|
|
|
|||
3/5/2017 - 4/1/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
For the Three Months Ended April 1, 2017
|
|
497,031
|
|
|
|
|
—
|
|
|
|
(a)
|
Includes the following types of share repurchase activity, when they occur: (1) shares repurchased in connection with the exercise of stock options (including periodic repurchases using accumulated option exercise proceeds), (2) shares tendered by individuals who used shares to pay the related taxes for grants of RSUs that vested, and (3) shares repurchased related to employee benefit programs (including our annual bonus swap program).
|
Exhibit No.
|
|
Descriptions
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a 14(a)/15d 14(a) of the Securities Exchange Act of 1934.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a 14(a)/15d 14(a) of the Securities Exchange Act of 1934.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.1
|
|
The following materials from The Kraft Heinz Company’s Quarterly Report on Form 10-Q for the period ended April 1, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Equity, (iv) the Condensed Consolidated Balance Sheets, (v) the Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements, and (vii) document and entity information.
|
|
|
The Kraft Heinz Company
|
|
Date:
|
May 4, 2017
|
|
|
|
|
By:
|
/s/ Paulo Basilio
|
|
|
|
Paulo Basilio
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
The Kraft Heinz Company
|
|
Date:
|
May 4, 2017
|
|
|
|
|
By:
|
/s/ Christopher R. Skinger
|
|
|
|
Christopher R. Skinger
|
|
|
|
Vice President, Global Controller
|
|
|
|
(Principal Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|