The high **Cash and cash equivalents** in **Q1 2024** were attributed to strong operating performance. Specifically, the net cash provided by operating activities increased by **58.6%** to **$771 million**, and free cash flow grew by **116.8%** to **$477 million**. These improvements were driven by lower cash outflows for inventories during a prior period of stock rebuilding, partially offset by increased cash outflows for variable compensation.  **[0001637459-24-000066_ex991-erq12024.htm:11]** **[0001637459-24-000069_khc-20240330.htm:5]** **[0001637459-24-000066_ex991-erq12024.htm:1]** 

Why was Cash and cash equivalents so high in Q1 2024?

The current portion of long-term debt dropped by **$16 million** in Q1 2024, from **$638 million as of December 30, 2023** to **$622 million as of March 30, 2024**. The change is relatively small and was not explicitly explained in the documents. However, such fluctuations typically result from **scheduled repayments** or **reclassifications** of debt obligations between current and non-current portions.  **[0001637459-24-000066_ex991-erq12024.htm:11]** **[0001637459-24-000069_khc-20240330.htm:5]** 

What led to the drop in the current portion of long-term debt in Q1 2024?

The documents do not provide specific factors that contributed to the rise in long-term debt in Q1 2024. They only note that the debt increased from **$19,394 million** as of December 30, 2023, to **$19,923 million** as of March 30, 2024.  **[0001637459-24-000069_khc-20240330.htm:5]** **[0001637459-24-000066_ex991-erq12024.htm:11]** 

What factors contributed to the rise in long-term debt in Q1 2024?

The decline in total assets in Q4 2024 was primarily driven by decreases in **goodwill** (a reduction of **$1,786 million**, linked to non-cash impairment losses related to the Oscar Mayer brand), **intangible assets, net** (a decline of **$2,349 million**), and **inventories** (a decrease of **$238 million**).  **[0001637459-25-000011_khc-20241228.htm:94]** **[0001637459-25-000006_ex991-erq42024.htm:3]** 

What drove the decline in total assets in Q4 2024?

001679d3dbc07e4ef31d5e9895e50c839c4609baf3696791217e2b7c9e0a2142

The operating income turned negative in Q3 2024 primarily due to **non-cash impairment losses totaling $1.4 billion**. These losses included **$707 million in goodwill impairments** and **$721 million in intangible asset impairments** (notably on the Lunchables brand), which were **$766 million higher** than in Q3 2023. Without these impairments, operating income would have actually increased by **$12 million**, but the substantial impact of the impairments, combined with factors such as unfavorable volume/mix, increased manufacturing expenses, and changes in unrealized losses/gains on commodity hedges, drove the operating income to a loss.  **[0001637459-24-000144_khc-20240928.htm:46]** **[0001637459-24-000138_ex991-erq32024.htm:3]** 

Why did Operating income/(loss) turn negative in Q3 2024?

The sharp increase in SG&A expenses in Q2 2024 was primarily driven by a **$854 million goodwill impairment loss**—a non-cash charge that was absent in Q2 2023—and secondarily by a rise in underlying expenses (from **$885 million to $918 million**) due to increased investments in **marketing, technology, and R&D**.  **[0001637459-24-000125_ex991-erq22024.htm:3]** **[0001637459-24-000125_ex991-erq22024.htm:10]** **[0001637459-24-000129_khc-20240629.htm:5]** **[0001637459-24-000125_ex991-erq22024.htm:10]** **[KHC_3395530_3]** 

What drove the sharp increase in SG&A expenses in Q2 2024?

Goodwill impairment losses nearly tripled in FY 2024 because of a combination of **segment-specific impairments**, significant **macroeconomic challenges**, and **reporting unit reorganizations**. Notably, the **North America** impairment increased substantially due to the reorganization and subsequent impairment of the **Meat & Cheese (MC)** reporting unit, while the **International Developed Markets** experienced sharp impairments driven by declining profitability assumptions, and **Emerging Markets** were impacted by challenging macroeconomic conditions such as currency devaluation. These factors collectively resulted in a marked rise in impairment losses from **$510 million** in FY 2023 to **$1.6 billion** in FY 2024.  **[0001637459-25-000011_khc-20241228.htm:115]** **[0001637459-25-000011_khc-20241228.htm:116]** 

Why did Goodwill impairment losses nearly triple in FY 2024?

The spike in **Intangible asset impairment losses** in Q4 2024 was primarily driven by a **non-cash impairment loss related to the Oscar Mayer brand**, which resulted from additional perceived risk in achieving long-term cash flow forecasts for the meats business. This impairment contributed to the total of **$1.31 billion** in losses during the quarter, and additional impairments recognized in Q3 2024 for other brands also played a role.  **[0001637459-25-000011_khc-20241228.htm:122]** **[0001637459-25-000006_ex991-erq42024.htm:3]** **[0001637459-25-000006_ex991-erq42024.htm:10]** 

What caused the spike in Intangible asset impairment losses in Q4 2024?

The basic EPS turned negative in Q3 2024 primarily due to **significant non-cash impairment losses** totaling **$1.4 billion** (including **$707 million in goodwill impairment losses** and **$721 million in intangible asset impairment losses**) largely related to the Lunchables brand. Additionally, a **sharp decline in operating income**—falling to a loss of **$(101) million** compared to **$653 million** in Q3 2023—combined with **unfavorable volume/mix** and **higher manufacturing expenses**, contributed to a net loss of **$(290) million** in the period, which drove the basic EPS into negative territory.  **[0001637459-24-000138_ex991-erq32024.htm:3]** **[0001637459-24-000144_khc-20240928.htm:46]** **[0001637459-24-000138_ex991-erq32024.htm:10]** 

Why did Basic EPS turn negative in Q3 2024?

6e256932c7b91b3f44a1eb9663aad5dcb19ce51aced74eaa97672983efb48bf5

Operating Cash Flow was so high in **Q1 2024** primarily because the company experienced **lower cash outflows for inventories**, as stock rebuilding that occurred in the prior year did not recur in the current period. This favorable condition was partially offset by **higher cash outflows for variable compensation**, but the net effect was a significant increase in operating cash flow.  **[0001637459-24-000066_ex991-erq12024.htm:1]** **[0001637459-24-000069_khc-20240330.htm:39]** 

Why was Operating Cash Flow so high in Q1 2024?

The documents do not provide any details regarding Free Cash Flow or the reasons for its near doubling in Q1 2024 [N/A].

Why did Free Cash Flow nearly double in Q1 2024?

Operating cash flow in Q2 2024 was lower primarily **because higher cash outflows for variable compensation** partially offset other favorable factors such as improvements in working capital (notably in inventory and accounts payable) and higher Adjusted Operating Income.  **[0001637459-24-000129_khc-20240629.htm:51]** 

Why was Operating Cash Flow lower in Q2 2024?

Based on the provided documents, there is no information regarding **Free Cash Flow** or the reasons behind its decline in Q2 2024. The documents only address the **Payments to acquire business, net of cash acquired** line item, which remained at **$0 million** for both Q2 2023 and Q2 2024.  **[0001637459-24-000125_ex991-erq22024.htm:15]** **[0001637459-24-000129_khc-20240629.htm:8]**  Therefore, we cannot definitively determine why Free Cash Flow declined in Q2 2024.

Why did Free Cash Flow decline in Q2 2024?

adf9371461e01afca475c3ccc3b4274f6d0720eb4989b789b5918d5dabc1e569

Cash and cash equivalents (USD, millions)

Trade receivables (net) (USD, millions)

Inventories (USD, millions)

Prepaid expenses (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Property, plant and equipment, net (USD, millions)

Goodwill (USD, millions)

Intangible assets, net (USD, millions)

Other non-current assets (USD, millions)

TOTAL ASSETS (USD, millions)

Current portion of long-term debt (USD, millions)

Accounts payable / Trade payables (USD, millions)

Accrued marketing (USD, millions)

Interest payable (USD, millions)

Other current liabilities (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Deferred income taxes (USD, millions)

Accrued postemployment costs (USD, millions)

Long-term deferred income (USD, millions)

Other non-current liabilities (USD, millions)

TOTAL LIABILITIES (USD, millions)

Redeemable noncontrolling interest (USD, millions)

Common stock (USD, millions)

Additional paid-in capital (USD, millions)

Retained earnings/(deficit) (USD, millions)

Accumulated other comprehensive income/(losses) (USD, millions)

Treasury stock, at cost (USD, millions)

Total shareholders' equity (USD, millions)

Noncontrolling interest (USD, millions)

TOTAL EQUITY (USD, millions)

TOTAL LIABILITIES AND EQUITY (USD, millions)

50e4268c5ab42d2ced6f36595d35b0a651ba2b7d1e2b8724596b4a639de31520

Net income/(loss) [USD, millions]

Depreciation and amortization [USD, millions]

Divestiture-related license income [USD, millions]

Equity award compensation expense [USD, millions]

Deferred income tax provision/(benefit) [USD, millions]

Postemployment benefit plan contributions [USD, millions]

Nonmonetary currency devaluation [USD, millions]

Loss/(gain) on sale of business [USD, millions]

Other items, net [USD, millions]

Net cash provided by/(used for) operating activities [USD, millions]

Capital expenditures [USD, millions]

Proceeds from sale of business, net of cash disposed and working capital adjustments [USD, millions]

Other investing activities, net [USD, millions]

Net cash provided by/(used for) investing activities [USD, millions]

Proceeds from issuance of long-term debt [USD, millions]

Dividends paid [USD, millions]

Repurchases of common stock [USD, millions]

Other financing activities, net [USD, millions]

Net cash provided by/(used for) financing activities [USD, millions]

Effect of exchange rate changes on cash, cash equivalents, and restricted cash [USD, millions]

Net increase/(decrease) in cash, cash equivalents, and restricted cash [USD, millions]

Balance at beginning of period cash, cash equivalents, and restricted cash [USD, millions]

Balance at end of period cash, cash equivalents, and restricted cash [USD, millions]

dcaaeb331546a910be9e57686a10d7fe173665b973134afc68602ab1361e4cfe

Net sales (USD, millions)

Cost of products sold (USD, millions)

Gross profit (USD, millions)

Selling, general and administrative expenses (USD, millions)

Operating income/(loss) (USD, millions)

Interest expense (USD, millions)

Other expense/(income) (USD, millions)

Income/(loss) before income taxes (USD, millions)

Provision for/(benefit from) income taxes (USD, millions)

Net income/(loss) (USD, millions)

Net income/(loss) attributable to noncontrolling interest (USD, millions)

Net income/(loss) attributable to common shareholders (USD, millions)

Basic earnings/(loss) per share (USD)

Diluted earnings/(loss) per share (USD)

4ea57790fb54ed53c5666d54a1821801fc0df3f480eedc0ec7e21e914d36e31d

6f0fdd79dd8265f472043b836f2f352c04b7d53e470da9a031a0b607dd4d940a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

187f6442d9caf156b72a7df5a160ae24a518708aba697fa412061747a698d9b6

Adjustments for Non-Cash Items (USD, Millions)

Stock-Based Compensation (USD, Millions)

Changes in Working Capital (USD, Millions)

Capital Expenditures (USD, Millions)

Proceeds from Debt (USD, Millions)

Repayments of Debt (USD, Millions)

Share Repurchases (USD, Millions)

Dividend Payments (USD, Millions)

Net Change in Cash (USD, Millions)

b6582e847e6690681003360ac56cfe3f5667d4580cc7570ab17277479c20e02d

Number of employees in Russia (count)

Pricing in North America (percentage points)

Volume/mix in North America (percentage points)

Pricing in International Developed Markets (percentage points)

Volume/mix in International Developed Markets (percentage points)

Pricing in Emerging Markets (percentage points)

Volume/mix in Emerging Markets (percentage points)

Pricing in Kraft Heinz (total) (percentage points)

Volume/mix in Kraft Heinz (total) (percentage points)

f0d6aaa97c1b2d10bde19dc646a401db6c16e67b555d35c0a69b565169d3ab05

9ee57de793736429d27690dc36941272329bc701d16d8f2b4c6ebced625eb41e

North America

- United States

- Canada

International

- International Developed Markets

- Emerging Markets

- United Kingdom

- Other

EMEA

Rest of World

- Europe

- Asia/Pacific

- Latin America

- RIMEA

Other (Unspecified)

Total Revenue

ae27052a8cac88f7148155292c2d3adb2f09ba994dd531af304755f7f8550dd0

Kraft Heinz (KHC)

Financials