Name: Kraft Heinz Co. (NASDAQ:KHC) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Kraft Heinz Co., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 28, 2019	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
Net income (loss)	1,933)	(10,254)	10,990)	3,642)	647)
Depreciation and amortization	994)	983)	1,036)	1,337)	740)
Amortization of postretirement benefit plans prior service costs (credits)	(306)	(339)	(328)	(333)	(112)
Amortization of inventory step-up	—)	—)	—)	—)	347)
Equity award compensation expense	46)	33)	46)	46)	133)
Deferred income tax provision (benefit)	(293)	(1,967)	(6,467)	(29)	(317)
Postemployment benefit plan contributions	(32)	(76)	(1,659)	(494)	(286)
Goodwill and intangible asset impairment losses	1,899)	15,936)	49)	—)	58)
Nonmonetary currency devaluation	10)	146)	36)	24)	234)
(Gain) loss on sale of business	(420)	15)	—)	—)	—)
Other items, net	(46)	160)	219)	16)	356)
Trade receivables	140)	(2,280)	(2,629)	80)	838)
Sold receivables	—)	—)	—)	454)	(422)
Inventories	(277)	(251)	(251)	(130)	25)
Accounts payable	(58)	(23)	464)	943)	(119)
Other current assets	52)	(146)	(67)	(42)	114)
Other current liabilities	(90)	637)	(912)	(276)	231)
Changes in current assets and liabilities	(233)	(2,063)	(3,395)	1,029)	667)
Adjustments to reconcile net income (loss) to operating cash flows	1,619)	12,828)	(10,463)	1,596)	1,820)
Net cash provided by operating activities	3,552)	2,574)	527)	5,238)	2,467)
Cash receipts on sold receivables	—)	1,296)	2,286)	—)	—)
Capital expenditures	(768)	(826)	(1,217)	(1,247)	(648)
Payments to acquire business, net of cash acquired	(199)	(248)	—)	—)	(9,468)
Proceeds from net investment hedges	590)	24)	—)	—)	—)
Proceeds from sale of business, net of cash disposed	1,875)	18)	—)	—)	—)
Other investing activities, net	13)	24)	87)	134)	412)
Net cash (used for) provided by investing activities	1,511)	288)	1,156)	(1,113)	(9,704)
Repayments of long-term debt	(4,795)	(2,713)	(2,644)	(86)	(12,314)
Proceeds from issuance of long-term debt	2,967)	2,990)	1,496)	6,981)	14,834)
Debt prepayment and extinguishment costs	(99)	—)	—)	—)	—)
Proceeds from issuance of commercial paper	557)	2,784)	6,043)	6,680)	—)
Repayments of commercial paper	(557)	(3,213)	(6,249)	(6,043)	—)
Proceeds from issuance of common stock to Sponsors	—)	—)	—)	—)	10,000)
Dividends paid, Series A Preferred Stock	—)	—)	—)	(180)	(900)
Dividends paid, common stock	(1,953)	(3,183)	(2,888)	(3,584)	(1,302)
Redemption of Series A Preferred Stock	—)	—)	—)	(8,320)	—)
Other financing activities, net	(33)	(28)	16)	(69)	(135)
Net cash provided by (used for) financing activities	(3,913)	(3,363)	(4,226)	(4,621)	10,183)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(6)	(132)	57)	(137)	(407)
Cash, cash equivalents, and restricted cash, net increase (decrease)	1,144)	(633)	(2,486)	(633)	2,539)
Cash, cash equivalents, and restricted cash, balance at beginning of period	1,136)	1,769)	4,255)	4,837)	2,298)
Cash, cash equivalents, and restricted cash, balance at end of period	2,280)	1,136)	1,769)	4,204)	4,837)

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 a period of significant volatility in earnings and structural shifts in capital allocation. While net income experienced extreme fluctuations, including a substantial loss in 2018, the cash flow from operating activities remained consistently positive, indicating a divergence between accounting profits and actual cash generation.

Operating Cash Flow and Earnings Volatility: Net income demonstrated extreme instability, peaking at 10,990 million USD in 2017 before plummeting to a loss of 10,254 million USD in 2018. This volatility was primarily driven by a non-cash impairment of goodwill and intangible assets totaling 15,936 million USD in 2018. Despite these accounting losses, net cash provided by operating activities remained resilient, recovering from a low of 527 million USD in 2017 to 3,552 million USD by 2019, suggesting that core operations continued to generate cash despite balance sheet write-downs.
Investment Trends and Asset Management: A strategic shift from acquisition to divestiture is evident. The period began with a massive cash outlay of 9,468 million USD for business acquisitions in 2015. By 2019, the strategy pivoted toward asset rationalization, resulting in 1,875 million USD in proceeds from the sale of business interests. Capital expenditures also showed a general declining trend, moving from 1,247 million USD in 2016 to 768 million USD in 2019, indicating a reduction in intensive capital spending.
Financing and Debt Dynamics: Financing activities were marked by heavy initial capitalization followed by debt reduction and shareholder returns. In 2015, there was a substantial inflow from the issuance of common stock (10,000 million USD) and long-term debt (14,834 million USD). Subsequent years were characterized by the redemption of Series A Preferred Stock (8,320 million USD in 2016) and consistent repayments of long-term debt. Common stock dividends remained a primary cash outflow, averaging approximately 2.7 billion USD per year over the five-year period.
Liquidity and Cash Position: The ending cash, cash equivalents, and restricted cash balance fluctuated from a high of 4,837 million USD in 2015 to a low of 1,136 million USD in 2018. The recovery to 2,280 million USD by 2019 was supported by stabilized operating cash flows and proceeds from the sale of business assets, offsetting the continuous outflows for debt repayment and dividends.

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