KRAFT FOODS NORTHFIELD, Ill., July 30, 2014 /PRNewswire/ -- Kraft Foods Group, Inc. (NASDAQ: KRFT) today announced financial results for the second quarter of 2014 that reflected the expected benefit from a shift in Easter-related shipments as well as the impacts of significant pricing actions in response to rising input costs.
"We continue to execute our playbook and are on track to deliver another solid year of growth in earnings and cash flow," said Kraft CEO Tony Vernon. "However, there's no question that economic and consumer trends are creating top-line growth challenges for the food and beverage industry, Kraft included. Our focus remains on driving profitable growth through brand renovation, innovation, impactful marketing and total cost management."
Q2 2014 FINANCIAL SUMMARY
Net revenues in the second quarter increased 0.7 percent to $4.7 billion.
-- Organic Net Revenues increased 1.5 percent from improved volume/mix and
pricing benefits of 0.9 percentage points and 0.6 percentage points,
respectively.
-- Revenue was favorably impacted by approximately 2.5 percentage points
from Easter-related shipments shifting to the second quarter of this
year. Excluding this factor, volumes were negatively impacted by
significant price increases in response to higher input costs.
Operating income in the second quarter decreased 37.5 percent to $0.9 billion.
-- Second quarter operating income last year included a $604 million
benefit from market-based impacts to post-employment benefit plans.(2)
-- Excluding this factor, operating income was up strongly, reflecting the
benefits of lower spending on cost savings initiatives,(3) lower
expenditures on in-store activity, improved overhead costs and
manufacturing productivity. These gains were partially offset by
unfavorable pricing net of commodity costs as well as an unfavorable
change in unrealized gains/losses from hedging activities.
Earnings per share in the second quarter were $0.80.
-- EPS in the second quarter last year was $1.38, which included a $0.62
benefit from market-based impacts to post-employment benefit plans.
-- Excluding this factor, EPS growth reflected an increase in operating
income, partially offset by a higher year-over-year tax rate.
Free Cash Flow through six months was up 13.8 percent to $454 million.
-- Lower pension contributions were the primary driver of the improvement
in Free Cash Flow versus the first half of last year.
SECOND QUARTER BUSINESS SEGMENT HIGHLIGHTS
Cheese:
-- Net revenues of $952 million increased 1.6 percent from the prior year
due to significant pricing actions in response to record-high dairy
costs. Lower volume/mix versus the prior year reflected volume declines
resulting from price increases that were partially offset by the benefit
of Easter-related shipments shifting to the second quarter of this year.
-- Operating income declined 6.7 percent versus the prior year due to lower
volumes and product recall costs. Lower spending on cost savings
initiatives partially offset these factors.
Refrigerated Meals:
-- Net revenues of $916 million increased 2.6 percent from the prior year
from a combination of price increases related to higher input costs and
volume/mix gains driven by the introduction of P3 Portable Protein
Packs, an Easter timing benefit in bacon and continued momentum in
Lunchables. Volume gains were partially offset by lower volumes in cold
cuts related to significant price increases during the quarter.
-- Operating income growth of 12.5 percent was driven by overhead cost
savings and lower spending on cost savings initiatives.
Beverages:
-- Net revenues of $748 million were flat versus the prior year as volume
gains driven by coffee and Capri Sun ready-to-drink beverages were
offset by lower pricing caused by an increase in promotional spending
versus prior year.
-- Operating income declined 10.3 percent as the benefits of volume growth
and lower spending on cost savings initiatives versus the prior year
were more than offset by the impact of lower pricing.
Meals & Desserts:
-- Net revenues of $518 million were 5.0 percent lower than the prior year,
primarily driven by continued weakness in ready-to-eat Jell-O desserts
and lower pricing due to increased promotional activity behind Kraft and
Velveeta dinners.
-- Operating income increased 3.1 percent versus the prior year due to
favorable timing of marketing expenses versus the prior year and lower
spending on cost savings initiatives, which were partially offset by
unfavorable pricing net of commodity costs.
Enhancers & Snack Nuts:
-- Net revenues of $600 million increased 1.4 percent from the prior year
reflecting the benefit of the Easter shift as well as continued growth
in Planters snack nuts.
-- Operating income growth of 18.2 percent reflected lower manufacturing
costs as well as lower expenditures on in-store activity.
Canada:
-- Net revenues of $523 million declined 3.1 percent versus last year due
to an unfavorable currency impact. Excluding the currency impact,
Organic Net Revenue growth of 3.6 percent reflected Easter-related
shipments shifting to the second quarter of this year driving a solid
increase in volume/mix.
-- Operating income declined 6.3 percent including an unfavorable currency
impact. Excluding this factor, operating income was flat, reflecting
favorable timing of marketing expenses versus the prior year and
improved volume/mix that were offset by unfavorable pricing net of
commodity costs.
Other Businesses:
-- Net revenues of $490 million increased 6.1 percent from the prior year
as a result of price increases to offset higher commodity costs.
-- Operating income growth of 23.2 percent was driven by productivity gains
and favorable pricing net of commodity costs.
CONFERENCE CALL
Kraft will host a conference call to discuss its second quarter 2014 results today at 4 p.m. Central time.
The call will be hosted by:
-- Tony Vernon, CEO
-- Teri List-Stoll, EVP and CFO
-- Chris Jakubik, VP, Investor Relations
Live Event Dial-in Details:
United States Dial-In: 1-888-350-0137
International Dial-In: 1-970-315-0478
Access code: 24944255
To ensure timely access, participants should dial in approximately 10 minutes before the call starts. A listen-only webcast with accompanying presentation will be available in the Investor Center section of Kraft's Web site at ir.kraftfoodsgroup.com, under "Events & Presentations."
A replay of the conference call will be available until August 9, 2014, by calling 855-859-2056 from the United States and Canada or 404-537-3406 from other locations. The access code for the replay is 24944255. An archive of the webcast will be available for one year following the conference call on Kraft's Web site.
ABOUT KRAFT FOODS GROUP
Kraft Foods Group, Inc. (NASDAQ: KRFT) is one of North America's largest consumer packaged food and beverage companies, with annual revenues of more than $18 billion. The company's iconic brands include Kraft, Oscar Mayer, Velveeta, Planters, Philadelphia, Maxwell House, Lunchables, Capri Sun, Kool-Aid and Jell-O. Kraft's 22,500 employees in the U.S. and Canada have a passion for making the foods and beverages people love. Kraft is a member of the Standard & Poor's 500 and the NASDAQ-100 indices. For more information, visit www.kraftfoodsgroup.com and www.facebook.com/kraft.
FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking statements. Words such as "focus," "create," "execute," "deliver," "drive," "will," and variations of such words and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding Kraft's growth, progress, total cost management and investments. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are beyond Kraft's control. Important factors that affect Kraft's business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, increased competition; Kraft's ability to maintain, extend and expand its reputation and brand image; Kraft's ability to differentiate its products from other brands; increasing consolidation of retail customers; changes in relationships with significant customers and suppliers; Kraft's ability to predict, identify and interpret changes in consumer preferences and demand; Kraft's ability to drive revenue growth in its key product categories, increase its market share, or add products; volatility in commodity, energy and other input costs; changes in Kraft's management team or other key personnel; Kraft's geographic focus in North America; changes in regulations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; Kraft's ability to complete or realize the benefits from potential acquisitions, alliances, divestitures or joint ventures; Kraft's indebtedness and ability to pay such indebtedness; disruptions in information technology networks and systems; Kraft's inability to protect intellectual property rights; weak economic conditions; tax law changes; the tax treatment of Kraft's spin-off from Mondelez International, Inc.; volatility of market-based impacts to post-employment benefit plans; pricing actions; and other factors. For additional information on these and other factors that could affect Kraft's forward-looking statements, see Kraft's risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission, including its most recently filed Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K. Kraft disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.
NON-GAAP AND OTHER FINANCIAL MEASURES
To supplement Kraft's financial statements presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), Kraft presents Organic Net Revenues and Free Cash Flow, both of which are considered non-GAAP financial measures. The presentations of Organic Net Revenues and Free Cash Flow are intended to supplement investors' understanding of Kraft's operating results and liquidity. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Kraft's results prepared in accordance with GAAP. In addition, the non-GAAP measures Kraft uses may differ from non-GAAP measures used by other companies, and other companies may not define the non-GAAP measures Kraft uses in the same way.
Kraft currently defines Organic Net Revenues as net revenues excluding the impact of transactions with Mondelez International, acquisitions, divestitures (including the termination of a full line of business due to the loss of a licensing or distribution arrangement, and the complete exit of business out of a foreign country), currency and the 53rd week of shipments when it occurs. Management believes that presenting Organic Net Revenues is useful to investors because it (i) provides investors meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view Kraft's performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate Kraft's historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating Kraft.
Kraft defines Free Cash Flow as cash flow from operations less capital expenditures. Management believes that Free Cash Flow is useful to investors because it reflects Kraft's cash available for uses including investments in growth and product development and it reflects Kraft's ability to generate cash while maintaining its fixed assets.
See the attached schedules for supplemental financial data and corresponding reconciliations of Organic Net Revenues to net revenues for the three and six months ended June 28, 2014 and June 29, 2013 and Free Cash Flow to operating cash flow for the six months ended June 28, 2014 and June 29, 2013.
As previously announced, beginning in 2013, Kraft adopted a mark-to-market accounting policy for Kraft's post-employment benefit obligations. Kraft discloses market-based impacts in order to provide better transparency to investors in evaluating Kraft. Management currently defines market-based impacts to post-employment benefit plans as the costs or benefits resulting from the change in discount rates, the difference between Kraft's estimated and actual return on trust assets, and other assumption changes driven by changes in the law or other external factors.
1 Please see the
discussion of
non-GAAP and
other
financial
measures and
the
reconciliation
to GAAP at
the end of
this press
release.
Please see the
discussion of
non-GAAP and
other
financial
measures at
the end of
this press
2 release.
3 Cost savings
initiatives
are related
to
reorganization
activities
including
severance,
asset
disposals,
and other
activities.
Included
within cost
savings
initiatives
are
activities
related to
the
previously
disclosed
multi-year
$625 million
restructuring
program.
Kraft Foods Group, Inc.
Condensed Consolidated Statements of Earnings
For the Three Months Ended Schedule 1
----------
(in millions of dollars, except per share data) (Unaudited)
June 28, June 29, % Change
Fav / (Unfav)
2014 2013
---- ----
Net revenues $4,747 $4,716 0.7%
Cost of sales1,2 3,226 2,780 (16.0)%
----- -----
Gross profit 1,521 1,936 (21.4)%
Selling, general and
administrative expenses1,2 647 516 (25.4)%
Asset impairment and exit
costs(1) - 22 +100.0%
--- ---
Operating income 874 1,398 (37.5)%
Interest and other expense, net 133 130 (2.3)%
--- ---
Earnings before income
taxes 741 1,268 (41.6)%
Provision for income taxes 259 439 41.0%
Effective tax rate 35.0% 34.6%
---- ----
Net earnings $482 $829 (41.9)%
Per share data:
Basic earnings per share $0.81 $1.39 (41.7)%
Diluted earnings per share $0.80 $1.38 (42.0)%
Weighted-average shares of common stock outstanding:
Basic 595 594 (0.2)%
Diluted 600 599 (0.2)%
(1) In the second quarter of 2014,
Kraft recorded expenses of $21 million
in cost savings initiatives. This was
comprised of $18 million of expense
within cost of sales and $3 million of
expense within selling, general and
administrative expenses. In the second
quarter of 2013, Kraft recorded
expenses of $82 million in cost savings
initiatives. This was comprised of $26
million of expense within cost of
sales; $34 million of expense within
selling, general and administrative
expenses; and $22 million of expense
within asset impairment and exit costs.
(2) There were no post-employment
benefit plan remeasurements in the
second quarter of 2014. In the second
quarter of 2013, Kraft recorded $604
million of pre-tax income within cost
of sales ($350 million) and selling,
general and administrative expenses
($254 million) related to market-based
impacts to certain post-employment
benefit plans. This income amounted to
$369 million after-tax, and had a
$0.62 favorable impact on EPS.
Kraft Foods Group, Inc.
Reconciliation of GAAP to Non-GAAP Information
Net Revenues Schedule 2
----------
For the Three Months Ended
(in millions of dollars) (Unaudited)
% Change Organic Growth Drivers
-------- ----------------------
Reported Impact of Sales to Mondelez Organic Reported Organic Vol / Price
(Non-GAAP) (Non-GAAP)
(GAAP) Currency International (GAAP) Mix
----- -------- ------------- ----- ---
June 28, 2014
-------------
Cheese $952 $ - $(14) $938 1.6% 2.3% (5.4)pp 7.7pp
Refrigerated Meals 916 - - 916 2.6% 2.6% 1.2pp 1.4pp
Beverages 748 - - 748 0.1% 0.1% 6.7pp (6.6)pp
Meals & Desserts 518 - - 518 (5.0)% (5.0)% (2.4)pp (2.6)pp
Enhancers & Snack Nuts 600 - - 600 1.4% 1.9% 4.6pp (2.7)pp
Canada 523 35 (4) 554 (3.1)% 3.6% 4.0pp (0.4)pp
Other Businesses 490 4 (22) 472 6.1% 5.1% (0.6)pp 5.7pp
--- --- --- --- --- --- ------- -----
Kraft Foods Group, Inc. $4,747 $39 $(40) $4,746 0.7% 1.5% 0.9pp 0.6pp
====== === ==== ====== === === ===== =====
June 29, 2013
-------------
Cheese $937 $ - $(20) $917
Refrigerated Meals 893 - - 893
Beverages 747 - - 747
Meals & Desserts 545 - - 545
Enhancers & Snack Nuts 592 - (3) 589
Canada 540 - (5) 535
Other Businesses 462 - (13) 449
--- --- --- ---
Kraft Foods Group, Inc. $4,716 $ - $(41) $4,675
====== =============== ==== ======
Kraft Foods Group, Inc.
Operating Income Schedule 3
----------
For the Three Months Ended
(in millions of dollars) (Unaudited)
Reported (GAAP)
--------------
June 28, June 29, % Change
2014 2013 Fav / (Unfav)
---- ---- -------------
Operating Income:
-----------------
Cheese $140 $150 (6.7)%
Refrigerated Meals 117 104 12.5%
Beverages 113 126 (10.3)%
Meals & Desserts 166 161 3.1%
Enhancers & Snack
Nuts 169 143 18.2%
Canada 105 112 (6.3)%
Other Businesses 69 56 23.2%
Unrealized gains /
(losses) on
hedging
activities (19) 2
Certain post-
employment
benefit plan
income 32 567
General corporate
expenses (18) (23)
Kraft Foods Group,
Inc. $874 $1,398 (37.5)%
==== ======
Note: In the second quarter of 2014,
Kraft recorded net expenses of $21
million related to cost savings
initiatives within segment operating
income and general corporate expenses
as follows: expenses in Cheese ($3
million); expenses in Refrigerated
Meals ($4 million); expenses in
Beverages ($3 million); expenses in
Meals & Desserts ($2 million); expenses
in Enhancers & Snack Nuts ($10
million); expenses in Canada ($1
million); expenses in Other Businesses
($1 million); and income in General
corporate expenses ($3 million). In the
second quarter of 2013, Kraft recorded
expenses of $82 million related to cost
savings initiatives within segment
operating income and general corporate
expenses as follows: Cheese ($29
million); Refrigerated Meals ($11
million); Beverages ($10 million);
Meals & Desserts ($7 million);
Enhancers & Snack Nuts ($7 million);
Canada ($2 million); Other Businesses
($6 million) and General corporate
expenses ($10 million). There were no
post-employment benefit plan
remeasurements in the second quarter of
2014. In the second quarter of 2013,
Kraft recorded $604 million of income
related to market-based impacts to
certain post-employment benefit plans.
Kraft Foods Group, Inc.
Condensed Consolidated Statements of Earnings
For the Six Months Ended Schedule 4
----------
(in millions of dollars, except per share data) (Unaudited)
June 28, June 29, % Change
2014 2013 Fav / (Unfav)
---- ---- -------------
Net revenues $9,109 $9,229 (1.3)%
Cost of sales1,2 6,028 5,823 (3.5)%
----- -----
Gross profit 3,081 3,406 (9.5)%
Selling, general and
administrative expenses1,2 1,305 1,115 (17.0)%
Asset impairment and exit
costs(1) (2) 84 +100.0%
--- ---
Operating income 1,778 2,207 (19.4)%
Interest and other expense, net 249 253 1.6%
--- ---
Earnings before income
taxes 1,529 1,954 (21.8)%
Provision for income taxes 534 669 20.2%
Effective tax rate 34.9% 34.2%
---- ----
Net earnings $995 $1,285 (22.6)%
Per share data:
Basic earnings per share $1.67 $2.16 (22.7)%
Diluted earnings per share $1.65 $2.14 (22.9)%
Weighted-average shares of
common stock outstanding:
Basic 595 593 (0.3)%
Diluted 600 598 (0.3)%
1 In the first six months of 2014,
Kraft recorded net expenses of $35
million in cost savings initiatives.
This was comprised of $25 million of
expense within cost of sales; $12
million of expense within selling,
general and administrative expenses;
and $2 million of income within
asset impairment and exit costs. In
the first six months of 2013, Kraft
recorded expenses of $201 million in
cost savings initiatives. This was
comprised of $50 million of expense
within cost of sales; $67 million of
expense within selling, general and
administrative expenses; and $84
million of expense within asset
impairment and exit costs.
2 In the first six months of 2014,
Kraft recorded $49 million of pre-
tax income within cost of sales
related to market-based impacts to
certain post-employment benefit
plans as Kraft recognized
remeasurement gains in the first
quarter of the current year that
were previously capitalized into
inventory at year-end. This income
amounted to $10 million after-tax,
due to the inclusion of a discrete
tax item, and had a $0.02 favorable
impact on 2014 EPS. In the first six
months of 2013, Kraft recorded $604
million of pre-tax income within
cost of sales ($350 million) and
selling, general and administrative
expenses ($254 million) related to
market-based impacts to certain
post-employment benefit plans. This
income amounted to $369 million
after-tax, and had a $0.62
favorable impact on EPS.
Kraft Foods Group, Inc.
Reconciliation of GAAP to Non-GAAP Information
Net Revenues Schedule 5
----------
For the Six Months Ended
(in millions of dollars) (Unaudited)
% Change Organic Growth Drivers
-------- ----------------------
Reported Impact of Sales to Mondelez Organic Reported Organic Vol / Price
(GAAP) Currency International (Non-GAAP) (GAAP) (Non-GAAP) Mix
----- -------- ------------- --------- ----- --------- ---
June 28, 2014
-------------
Cheese $1,959 $ - $(25) $1,934 1.8% 2.3% (3.6)pp 5.9pp
Refrigerated Meals 1,732 - - 1,732 1.3% 1.3% 0.6pp 0.7pp
Beverages 1,422 - - 1,422 (2.5)% (2.5)% 2.8pp (5.3)pp
Meals & Desserts 1,016 - - 1,016 (6.4)% (6.4)% (5.7)pp (0.7)pp
Enhancers & Snack Nuts 1,103 - - 1,103 (1.9)% (1.4)% 0.8pp (2.2)pp
Canada 950 74 (8) 1,016 (7.0)% 0.2% 0.7pp (0.5)pp
Other Businesses 927 9 (40) 896 2.4% 1.9% (2.0)pp 3.9pp
--- --- --- --- --- --- ------- -----
Kraft Foods Group, Inc. $9,109 $83 $(73) $9,119 (1.3)% (0.4)% (0.9)pp 0.5pp
====== === ==== ====== ===== ===== ======= =====
June 29, 2013
-------------
Cheese $1,924 $ - $(33) $1,891
Refrigerated Meals 1,710 - - 1,710
Beverages 1,459 - - 1,459
Meals & Desserts 1,085 - - 1,085
Enhancers & Snack Nuts 1,124 - (5) 1,119
Canada 1,022 - (8) 1,014
Other Businesses 905 - (26) 879
--- --- --- ---
Kraft Foods Group, Inc. $9,229 $ - $(72) $9,157
====== === ==== ======
Kraft Foods Group, Inc.
Operating Income
For the Six Months Ended Schedule 6
----------
(in millions of dollars) (Unaudited)
Reported (GAAP)
--------------
June 28, 2014 June 29, 2013 % Change
Fav / (Unfav)
Operating Income:
-----------------
Cheese $327 $322 1.6%
Refrigerated Meals 213 201 6.0%
Beverages 244 251 (2.8)%
Meals & Desserts 308 331 (6.9)%
Enhancers & Snack
Nuts 317 301 5.3%
Canada 171 189 (9.5)%
Other Businesses 128 103 24.3%
Unrealized gains /
(losses) on
hedging
activities 23 (3)
Certain post-
employment
benefit plan
income 92 568
General corporate
expenses (45) (56)
Kraft Foods Group,
Inc. $1,778 $2,207 (19.4)%
====== ======
Note: In the first six months
of 2014, Kraft recorded
expenses of $35 million
related to cost savings
initiatives within segment
operating income and general
corporate expenses as follows:
Cheese ($7 million);
Refrigerated Meals ($6
million); Beverages ($2
million); Meals & Desserts ($2
million); Enhancers & Snack
Nuts ($14 million); Canada ($1
million); Other Businesses ($1
million); and General
corporate expenses ($2
million). In the first six
months of 2013, Kraft recorded
expenses of $201 million
related to cost savings
initiatives within segment
operating income and general
corporate expenses as follows:
Cheese ($63 million);
Refrigerated Meals ($26
million); Beverages ($32
million); Meals & Desserts
($20 million); Enhancers &
Snack Nuts ($17 million);
Canada ($6 million); Other
Businesses ($14 million); and
General corporate expenses
($23 million). In the first
six months of 2014, Kraft
recorded $49 million of income
related to market-based
impacts to certain post-
employment benefit plans,
while in the first six months
of 2013, Kraft recorded $604
million of income related to
market-based impacts to
certain post-employment
benefit plans.
Kraft Foods Group, Inc.
Condensed Consolidated Balance Sheets
(in millions of dollars) (Unaudited) Schedule 7
----------
June 28, December 28,
2014 2013
---- ----
ASSETS
Cash and cash equivalents $1,370 $1,686
Receivables (net of allowances of
$26 in 2014 and 2013) 1,186 1,048
Inventories 2,024 1,616
Deferred income taxes 339 360
Other current assets 192 198
--- ---
Total current assets 5,111 4,908
Property, plant and equipment,
net 4,130 4,115
Goodwill 11,510 11,505
Intangible assets, net 2,235 2,229
Other assets 359 391
TOTAL ASSETS $23,345 $23,148
======= =======
LIABILITIES
Current portion of long-term
debt $1,404 $4
Accounts payable 1,606 1,548
Accrued marketing 577 685
Accrued employment costs 143 184
Dividends payable 313 313
Accrued postretirement health
care costs 196 197
Other current liabilities 557 479
--- ---
Total current liabilities 4,796 3,410
Long-term debt 8,604 9,976
Deferred income taxes 653 662
Accrued pension costs 414 405
Accrued postretirement health
care costs 3,039 3,080
Other liabilities 376 428
--- ---
TOTAL LIABILITIES 17,882 17,961
EQUITY
Common Stock, no par value
(5,000,000,000 shares
authorized; 599,955,433 shares
issued at June 28, 2014 and
596,843,449 at December 28,
2013) - -
Additional paid-in capital 4,587 4,434
Retained earnings 1,648 1,281
Accumulated other comprehensive
losses (483) (499)
Treasury stock, at cost (289) (29)
---- ---
TOTAL EQUITY 5,463 5,187
----- -----
TOTAL LIABILITIES AND EQUITY $23,345 $23,148
======= =======
Kraft Foods Group, Inc.
Reconciliation of GAAP to Non-GAAP Information
Free Cash Flows Schedule 8
----------
For the Six Months Ended
(in millions of dollars) (Unaudited)
June 28, June 29,
2014 2013
---- ----
Net earnings $995 $1,285
Depreciation
and
amortization 191 204
Receivables,
net (151) (111)
Inventories (349) 16
Accounts
payable 44 (62)
Other (90) (721)
--- ----
Operating cash
flow 640 611
Capital
expenditures (186) (212)
---- ----
Free cash flow $454 $399
==== ====
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SOURCE Kraft Foods Group
