Analysis of Debt
Total Debt (Carrying Amount)
Kraft Heinz Co., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Commercial paper and other short-term debt
- The balance of commercial paper and other short-term debt exhibited significant volatility during the period. A notably high level of 4,645 million USD was recorded at the end of 2015, followed by a sharp decline to 460 million USD in 2016. Subsequently, a further drop to very low figures was observed, falling to 21 million USD in 2017, then to 6 million USD in 2019, suggesting a deliberate reduction or minimal reliance on this form of short-term financing after 2015.
- Current portion of long-term debt
- This component showed considerable fluctuation throughout the years. After starting at 79 million USD in 2015, the amount surged dramatically to 2,046 million USD in 2016 and peaked at 2,743 million USD in 2017. However, there was a sharp decrease to 377 million USD in 2018 and a rise again to 1,022 million USD in 2019. This pattern indicates variability in the short-term obligations portion allocated from long-term debt, reflecting possible refinancing activities or changes in debt repayment schedules.
- Long-term debt, excluding current portion
- The long-term debt balance, excluding current maturities, showed an overall moderate upward trend from 2015 through 2018, increasing from 25,151 million USD to a peak of 30,770 million USD in 2018. However, this was followed by a decline to 28,216 million USD in 2019. This suggests that while the company increased its long-term debt over the earlier years, it began to decrease its outstanding long-term liabilities slightly toward the end of the period.
- Total debt (carrying amount)
- Total debt closely mirrored the trends in long-term debt, rising from 25,234 million USD in 2015 to a high of 32,404 million USD in 2016 and 31,536 million USD in 2017, with a slight decrease to 31,168 million USD in 2018 and a more noticeable decline to 29,244 million USD in 2019. This trajectory indicates an overall peak in total debt around 2016-2017, followed by a gradual reduction in aggregate debt levels over the next two years.
- Overall Analysis
- The data indicates a strategic management of debt structure, with considerable shifts between short-term and current portions of long-term debt. The company substantially reduced reliance on commercial paper and other short-term borrowings after 2015, while the current portion of long-term debt varied significantly, suggesting active debt refinancing or repayment efforts. Meanwhile, the long-term debt expanded until 2018 before declining, contributing to a peak in total debt in 2016-2017 and a subsequent decline by 2019. This suggests a cautious approach to leverage, balancing between raising capital through debt and managing repayment obligations to reduce overall debt burden in the later years.
Total Debt (Fair Value)
| Dec 28, 2019 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total debt (fair value) | 31,100) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.06 |
Based on: 10-K (reporting date: 2019-12-28).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 6.44%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 4.88% | 971) | 47) | |
| 7.13% | 24,127) | 1,719) | |
| 2.25% | 2,834) | 64) | |
| 3.02% | 382) | 12) | |
| 6.25% | 170) | 11) | |
| 4.13% | 519) | 21) | |
| 5.50% | 48) | 3) | |
| 3.40% | 187) | 6) | |
| Total | 29,238) | 1,883) | |
| 6.44% | |||
Based on: 10-K (reporting date: 2019-12-28).
1 US$ in millions
2 Weighted-average interest rate = 100 × 1,883 ÷ 29,238 = 6.44%