An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Kraft Heinz Co., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
Total undiscounted future operating lease payments	—	694)	531)	474)	738)
Discount rate¹	—	6.45%	6.42%	6.41%	5.67%

Total present value of future operating lease payments	—	568)	417)	383)	591)

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).

¹ Weighted-average interest rate for Kraft Heinz Co. debt

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.45%
2019	185)	2019	185)	174)
2020	137)	2020	137)	121)
2021	105)	2021	105)	87)
2022	70)	2022	70)	55)
2023	49)	2023	49)	36)
2024 and thereafter	148)	2024	49)	34)
		2025	49)	32)
		2026	49)	30)
		2027	1)	1)
Total:	694)		694)	568)

Based on: 10-K (reporting date: 2018-12-29).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.42%
2018	103)	2018	103)	97)
2019	91)	2019	91)	80)
2020	73)	2020	73)	61)
2021	54)	2021	54)	42)
2022	45)	2022	45)	33)
2023 and thereafter	165)	2023	45)	31)
		2024	45)	29)
		2025	45)	27)
		2026	30)	17)
Total:	531)		531)	417)

Based on: 10-K (reporting date: 2017-12-30).

2016 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.41%
2017	94)	2017	94)	88)
2018	92)	2018	92)	81)
2019	77)	2019	77)	64)
2020	61)	2020	61)	48)
2021	43)	2021	43)	32)
2022 and thereafter	107)	2022	43)	30)
		2023	43)	28)
		2024	21)	13)
Total:	474)		474)	383)

Based on: 10-K (reporting date: 2016-12-31).

2015 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 5.67%
2016	120)	2016	120)	114)
2017	119)	2017	119)	107)
2018	106)	2018	106)	90)
2019	90)	2019	90)	72)
2020	68)	2020	68)	52)
2021 and thereafter	235)	2021	68)	49)
		2022	68)	46)
		2023	68)	44)
		2024	31)	19)
Total:	738)		738)	591)

Based on: 10-K (reporting date: 2015-12-31).

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Kraft Heinz Co., adjustments to financial statements

US$ in millions

	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported)	101,450)	103,461)	120,232)	120,480)	122,973)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	568)	417)	383)	591)
Total assets (adjusted)	101,450)	104,029)	120,649)	120,863)	123,564)
Adjustment to Total Debt
Total debt (as reported)	29,244)	31,168)	31,536)	32,404)	25,234)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	568)	417)	383)	591)
Add: Lease liabilities, operating leases, current	147)	—)	—)	—)	—)
Add: Lease liabilities, operating leases, non-current	454)	—)	—)	—)	—)
Total debt (adjusted)	29,845)	31,736)	31,953)	32,787)	25,825)

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).

^{1, 2} Equal to total present value of future operating lease payments.

Kraft Heinz Co., Financial Data: Reported vs. Adjusted

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Kraft Heinz Co., adjusted financial ratios

	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
Total Asset Turnover¹
Reported total asset turnover	0.25	0.25	0.22	0.22	0.15
Adjusted total asset turnover	0.25	0.25	0.22	0.22	0.15
Debt to Equity²
Reported debt to equity	0.57	0.60	0.48	0.56	0.44
Adjusted debt to equity	0.58	0.61	0.48	0.57	0.45
Return on Assets³ (ROA)
Reported ROA	1.91%	-9.85%	9.15%	3.01%	0.52%
Adjusted ROA	1.91%	-9.80%	9.12%	3.01%	0.51%

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).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Kraft Heinz Co. adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Kraft Heinz Co. adjusted debt to equity ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Kraft Heinz Co. adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Kraft Heinz Co., Financial Ratios: Reported vs. Adjusted

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	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net sales	24,977)	26,268)	26,232)	26,487)	18,338)
Total assets	101,450)	103,461)	120,232)	120,480)	122,973)
Activity Ratio
Total asset turnover¹	0.25	0.25	0.22	0.22	0.15
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales	24,977)	26,268)	26,232)	26,487)	18,338)
Adjusted total assets	101,450)	104,029)	120,649)	120,863)	123,564)
Activity Ratio
Adjusted total asset turnover²	0.25	0.25	0.22	0.22	0.15

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).

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 24,977 ÷ 101,450 = 0.25

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 24,977 ÷ 101,450 = 0.25

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Kraft Heinz Co. adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt	29,244)	31,168)	31,536)	32,404)	25,234)
Shareholders’ equity	51,623)	51,657)	66,034)	57,358)	57,685)
Solvency Ratio
Debt to equity¹	0.57	0.60	0.48	0.56	0.44
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	29,845)	31,736)	31,953)	32,787)	25,825)
Shareholders’ equity	51,623)	51,657)	66,034)	57,358)	57,685)
Solvency Ratio
Adjusted debt to equity²	0.58	0.61	0.48	0.57	0.45

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).

2019 Calculations

¹ Debt to equity = Total debt ÷ Shareholders’ equity
= 29,244 ÷ 51,623 = 0.57

² Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity
= 29,845 ÷ 51,623 = 0.58

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Kraft Heinz Co. adjusted debt-to-equity ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Kraft Heinz	1,935)	(10,192)	10,999)	3,632)	634)
Total assets	101,450)	103,461)	120,232)	120,480)	122,973)
Profitability Ratio
ROA¹	1.91%	-9.85%	9.15%	3.01%	0.52%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Kraft Heinz	1,935)	(10,192)	10,999)	3,632)	634)
Adjusted total assets	101,450)	104,029)	120,649)	120,863)	123,564)
Profitability Ratio
Adjusted ROA²	1.91%	-9.80%	9.12%	3.01%	0.51%

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).

2019 Calculations

¹ ROA = 100 × Net income (loss) attributable to Kraft Heinz ÷ Total assets
= 100 × 1,935 ÷ 101,450 = 1.91%

² Adjusted ROA = 100 × Net income (loss) attributable to Kraft Heinz ÷ Adjusted total assets
= 100 × 1,935 ÷ 101,450 = 1.91%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Kraft Heinz Co. adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Kraft Heinz Co. (NASDAQ:KHC)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

Kraft Heinz Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Kraft Heinz Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)