Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Kraft Heinz Co., consolidated income statement

US$ in millions

12 months ended:	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
Net sales	24,977)	26,268)	26,232)	26,487)	18,338)
Cost of products sold	(16,830)	(17,347)	(16,529)	(16,901)	(12,577)
Gross profit	8,147)	8,921)	9,703)	9,586)	5,761)
Selling, general and administrative expenses, excluding impairment losses	(3,178)	(3,205)	(2,881)	(3,444)	(3,122)
Goodwill impairment losses	(1,197)	(7,008)	—)	—)	—)
Intangible asset impairment losses	(702)	(8,928)	(49)	—)	—)
Selling, general and administrative expenses	(5,077)	(19,141)	(2,930)	(3,444)	(3,122)
Operating income (loss)	3,070)	(10,220)	6,773)	6,142)	2,639)
Interest expense	(1,361)	(1,284)	(1,234)	(1,134)	(1,321)
Other income (expense)	952)	183)	(9)	15)	(305)
Income (loss) before income taxes	2,661)	(11,321)	5,530)	5,023)	1,013)
(Provision for) benefit from income taxes	(728)	1,067)	5,460)	(1,381)	(366)
Net income (loss)	1,933)	(10,254)	10,990)	3,642)	647)
Net (income) loss attributable to noncontrolling interest	2)	62)	9)	(10)	(13)
Net income (loss) attributable to Kraft Heinz	1,935)	(10,192)	10,999)	3,632)	634)
Preferred dividends	—)	—)	—)	(180)	(900)
Net income (loss) attributable to common shareholders	1,935)	(10,192)	10,999)	3,452)	(266)

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).

The financial data reveals several key trends and shifts over the five-year period analyzed.

Net Sales: Net sales increased significantly from 2015 to 2016, rising from approximately 18.3 billion to 26.5 billion US dollars. However, sales remained relatively flat from 2016 through 2018, followed by a slight decline in 2019 to just under 25.0 billion.
Cost of Products Sold and Gross Profit: The cost of products sold closely mirrored sales trends, increasing sharply in 2016, then stabilizing with minor fluctuations through 2019. Gross profit grew substantially from 2015 to 2017, peaking near 9.7 billion US dollars, but decreased thereafter, falling to approximately 8.1 billion by 2019, indicating margin pressures in the latter years.
Selling, General and Administrative Expenses (SG&A): Excluding impairment losses, SG&A expenses increased modestly from 2015 to 2016, then decreased notably in 2017 before slightly rising again in 2018 and 2019. When considering impairment losses, there was a sharp increase in total SG&A expenses in 2018, driven by significant goodwill and intangible asset impairments totaling approximately 7.0 billion and 8.9 billion US dollars respectively. These impairments receded sharply in 2019 but still contributed to elevated SG&A expenses compared to prior years.
Operating Income (Loss): Operating income showed strong improvement from 2015 to 2017, achieving a peak of around 6.8 billion US dollars in 2017. However, the company experienced a substantial operating loss in 2018, consistent with the large impairment charges recorded that year. Operating income partially recovered in 2019, returning to a positive figure around 3.1 billion.
Interest Expense and Other Income/Expense: Interest expenses remained relatively stable throughout the period, fluctuating narrowly between approximately 1.1 billion and 1.4 billion US dollars annually. Other income and expense items showed variability but turned positive in 2018 and increased significantly in 2019, contributing beneficially to income before taxes.
Income Before Income Taxes: Income before income taxes rose steadily from 2015 to 2017, peaking near 5.5 billion US dollars. Then, a sharp loss occurred in 2018, aligning with operating results impacted by impairment losses. The figure improved in 2019 but did not return to prior peak levels.
Provision for Income Taxes: The tax provision swung from a tax expense in 2015 and 2016 to a substantial tax benefit in 2017 and 2018, likely due to tax credits or adjustments related to impairment charges or loss recognition. In 2019, there was a return to tax expense, though it remained lower than initial years.
Net Income (Loss): Net income attributable to the company’s shareholders showed significant volatility. Starting at a positive 634 million US dollars in 2015, it increased markedly to nearly 11.0 billion in 2017 before plummeting to a net loss exceeding 10 billion in 2018, primarily driven by the impairment expenses recorded. In 2019, net income rebounded to nearly 2.0 billion US dollars, underscoring partial recovery after the prior year’s challenges.
Preferred Dividends and Net Income to Common Shareholders: Preferred dividends were significant in 2015 and 2016 but absent in later years, which contributed to the fluctuations in net income attributable to common shareholders. The net income for common shareholders followed a pattern similar to the company’s overall net income, with earnings growth until 2017, a sharp downturn in 2018, and a positive turnaround in 2019.

Overall, the data reflects a period of growth in revenue and profitability until 2017, followed by substantial impairment-related charges that caused significant losses in 2018. Thereafter, the company showed signs of recovery in 2019, with improving operating results and net income, although sales declined slightly. The presence of large non-cash impairments in 2018 is a notable event impacting profitability during the analyzed timeframe.

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Kraft Heinz Co. (NASDAQ:KHC)

Income Statement