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HIVE Announces Quarterly Revenue of $14.3 Million, Gross Mining Margin of $3.6 Million and Achieves Adjusted EBITDA of $1.5 Million for the Quarter while HPC Revenue Strategy is Gaining Momentum With Annual Run Rate of $1.3 Million

Vancouver, British Columbia–(February 21, 2023) – HIVE Blockchain Technologies Ltd. (TSXV: HIVE) (NASDAQ: HIVE) (FSE: HBFA) (the “Company” or “HIVE”) a leading digital asset miners and green focused data center builder and operator, is pleased to announce the earnings report for the third quarter ended December 31, 2022 (all amounts in US dollars, unless otherwise indicated).

HIVE achieved revenue of $14.3 million this quarter, by mining 787 Bitcoin, with a 25% Gross Mining Margin representing $3.62 million of income from mining operations. This is notable, as the first full fiscal quarter for HIVE that does not include any Ethereum mining revenues, as the Ethereum Merge took place on September 15^th, 2022. Furthermore, average Bitcoin prices in this current quarter decreased from the prior quarter by approximately 15%, continuing this crypto winter that affects the entire Bitcoin mining sector. However, through hedging our energy contracts, selling power back to the grid, and optimizing our operating capacity to focus on maximum profit per KWHR, HIVE has realized profit from mining operations this quarter.

The Company notes that HIVE’s production of 787 Bitcoin this quarter represents an increase of 13% year over year, with the same period last year, having mined 697 Bitcoin reflecting a continued growth in our operating hashrate. This is in large part a result of the completion of our New Brunswick data center campus, which we have seen reach over 1 Exahash of Bitcoin mining capacity this year, operating in a four-building data center campus, which HIVE owns, and includes our own substation, transformers and electrical infrastructure. This large increase in quantity of Bitcoin production stands even as network difficulty has increased by 60% in this one-year period, while Bitcoin prices and prices have fallen approximately 50%.

Frank Holmes, HIVE’s Executive Chairman, stated, “We wish to again thank our loyal shareholders for believing in our vision to mine both Ethereum and Bitcoin. We are sad to see the higher margin from mining Ethereum gone however our HPC strategy which has taken longer to roll out is now growing rapidly on a month over month basis. We are happy to share that our robust growth is scalable and could potentially increase 10x fold over the next year as the demand for our high quality chips due to the huge global demand for Ai projects like GPT CHAT, medical research, machine learning and rendering. Further, HIVE was the first to use our software to help balance the electrical grid and resell back energy whenever there is spike in demand. This strategy has been good for the community and HIVE. Even with a challenging quarter for the global digital asset ecosystem, where we saw the capitulation of crypto prices due to the implosion of FTX and the related contagion with other exchanges, lenders and hedge funds. Strategically, we have not borrowed expensive debt against our mining equipment or pledged our Bitcoins for costly loans, thus our balance sheet remains healthy to weather this storm. We believe our low coupon fixed debt; attractive green renewable energy prices and high performing energy efficient ASIC and GPU chips will help us navigate through this crypto winter. The most recent unexpected challenge has been in Sweden which we cover in greater detail in our interim filings.”

Aydin Kilic, President & CEO of HIVE, added, “HIVE has skillfully navigated the digital asset mining industry in a post-Ethereum merge, when many questioned how we could continue to generate profit from operations. This has been answered by our gross mining margins of $3.6 million this quarter, during a time when many other crypto miners are struggling for solvency. In fact, our Bitcoin holdings have increased by 30% year over year for the period ending December 31, 2022 with 2,372 Bitcoin. In addition to this, we saw Bitcoin mining difficulties increase 60% during this period, reaching an all-time high of almost 40T. HIVE navigated this quarter by selling energy back to the grid, repurposing our GPUs to mine Bitcoin, and upgraded our fleet of ASICs to improve our overall efficiency. As previously reported, our GPUs are currently doing $80 per megawatt hour in revenue, which is similar to Bitcoin mining economics with ASICs. I am incredibly proud of the team, as we have among the leanest G&A as a percentage of revenue among our peers in the industry. HIVE is dedicated to delivering its shareholders value and strives to excel in optimization and efficiency; this quarter the numbers illustrate the merit of our approach and our success. We strive to set the gold standard of operational efficiency at HIVE while constantly adapting to changing market conditions with an agility mindset.”

HIVE achieved a gross mining margin of $3.6 million for the quarter, a 77% decrease over the prior quarter of $15.9 million due to the loss of Ethereum revenues from the Merge and lower Bitcoin prices. This decline in gross mining margin was predominantly driven by significant lower average cryptocurrency prices during this period which negatively affected us as well as the entire Bitcoin mining industry.

On a relative basis HIVE has been able to mine with healthy profit margins during periods of market volatility because of being globally diversified and enjoying attractive power costs in Sweden, Iceland, and Quebec.

Furthermore, HIVE’s average cost of production per Bitcoin was $13,599 (including cost of goods sold, not including SG&A) for the quarter ending December 31, 2022, a 37% increase in cost from the previous quarter ending September 30, 2022. The company notes that from October 2022 onwards, with Bitcoin mining hash rates and Difficulty at all-time highs, it is expected that the cost of production for Bitcoin will increase for the industry at large, as less Bitcoin per Terahash is being rewarded at these difficulty levels.

According to Anthony Power’s monthly industry research we are proud to have achieved and maintained among the best operational uptime amongst all its peers, with HIVE repeatedly emerging as one of the most efficient crypto miners based on digital assets mined per Exahash (commonly measured as quantity of mined Bitcoin per Exahash of reported hashrate).

Further to the Company’s news release dated February 15, 2023, as a result of the filing on the date hereof of the Company’s interim financial statements and accompanying management’s discussion and analysis for the three and nine months ended December 31, 2022 (the “Interim Filings“), a management cease trade order has not been necessary. Consequently, there will be no restriction of the Company’s chief executive officer and chief financial officer from trading the Company’s shares resulting from such management cease trade order. Details of the tax notice received in relation to one of the Company’s European subsidiaries is disclosed in the Interim Filings.

Mark-to-Market of Assets and Non-Cash Writedowns

There was continued pressure in the accounting world to take non-cash charges against mining equipment that is required to create digital assets. With the Ethereum move to proof-of-stake taking place in September 2022, the value of the GPU chips used in proof-of-work mining has fallen globally. Additionally, the price of primary ASIC chips moves in tandem with the price of Bitcoin. On big quarterly down swings like the last couple of quarters we reduce the value of the Bitcoin held in our treasury and the resale cost of the mining equipment, however when Bitcoin prices rise, they are written back up through inventory holdings and flow through the income statement using mark-to-market accounting, while equipment often is not written back up as the threshold to do so is higher. This is a conservative accounting treatment which public crypto mining companies usually follow.

Our adjusted EBITDA for the quarter was $1.5 million with the decline in digital asset prices during the quarter, in addition to a significant impairment of $61.5 million on mining equipment and deposits. Digital assets continue to be much more volatile than the stock market, thus our digital assets can significantly move income both up and down each quarter.

Q3 Quarterly Summary – December 31, 2022

Generated revenue of $14.3 million, with a gross mining margin¹ of $3.6 million
Mined 787 Bitcoin during the three-month period ended December 31, 2022
Adjusted EBITDA¹of $1.5 million for the three-month period
Working capital decreased by $21.6 million during the three-month period ended December 31, 2022
Digital currency assets of $39.0 million, as at December 31, 2022
Average cost of production per Bitcoin was $13,599, where the average Bitcoin price was $18,072, during the three-month period ended December 31, 2022. This also represents a 37% increase in production costs of Bitcoin from the previous quarter of $9,894 for the three months ended September 30, 2022 (average price of Bitcoin was $21,252 during this period)
Impairment on miner equipment of $38.8 million and of $22.7 million on equipment deposits during the three-month period ended December 31, 2022
Net loss before tax of $90.4 million for the three-month period attributable to impairment from the value of ASIC and GPU chips declining with the drop in Bitcoin and Ethereum prices and the mark-to-market Bitcoin HODL position

Q3 F2023 Financial Review

For the three months ended December 31, 2022, revenue from digital currency mining was $14.1 million, a decrease of approximately 51.6% from the prior year primarily due to the Merge, significant global hashrate growth combined with much lower average cryptocurrency prices.

Gross mining margin¹ during the period was $3.6 million, or 25% of income from digital currency mining, compared to $15.9 million, or 54% of income from digital currency mining, in the same period in the prior year. The Company’s gross mining margin¹ from digital currency mining is partially dependent on external network factors including mining difficulty, the amount of digital currency rewards and fees it receives for mining, as well as the market price of digital currencies. The decrease in gross mining margin¹ is greatly affected by the price of digital currencies which is approximately 67% of what it was in the prior year quarter.

The Company notes that, while adjusted EBITDA¹ this quarter was $1.5 million, because of mark to market accounting practice, net loss during the quarter ended December 31, 2022, was $90.0 million, or a loss of $1.09 per share, compared to net income of $51.2 million, or $0.66 per share, the same period last year. The decline from the prior year was driven primarily by the Merge, higher non-cash charges such as depreciation, unrealized valuation losses on digital currencies and investments, and impairment charges on equipment and equipment deposits, which in turn were all affected by lower Bitcoin and Ethereum prices seen in the current quarter. Adjusted EBITDA is a non-IFRS financial measurement and should be read in conjunction with and should not be viewed as an alternative to or replacement of measures of operating results and liquidity presented in accordance with IFRS.

Mr. Holmes noted, “At HIVE we strive to maintain a high-performance culture, which means that we always adapt to unexpected headwinds, and do our best to maintain operational excellence in the process.”

Table 1

EBITDA and Adjusted EBITDA

The Company uses EBITDA and Adjusted EBITDA as a metric that is useful for assessing its operating performance on a cash basis before the impact of non-cash items and acquisition related activities.

EBITDA is net income or loss from operations, as reported in profit and loss, before finance income and expense, tax and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted for removing other non-cash items, including share-based compensation, non-cash effect of the revaluation of digital currencies and one-time transactions.

Table 2

The Company emphasizes that “adjusted EBITDA” is not a GAAP or IFRS measurement and is included only for comparative purposes.

Non-Cash Charges

A non-cash charge is a write-down or accounting expense that does not involve a cash payment. Depreciation, amortization, depletion, stock-based compensation, and asset impairments are common non-cash charges that reduce earnings but not cash flows.

Financial Statements and MD&A

The Company’s Consolidated Financial Statements and Management’s Discussion and Analysis (MD&A) thereon for the three and nine months ended December 31, 2022 will be accessible on SEDAR at www.sedar.com under HIVE’s profile and on the Company’s website at www.HIVEblockchain.com.

HIVE Performance Cloud

HIVE is also pleased to announce its anticipated plans to launch HIVE Performance Cloud in calendar Q2 2023.

Prior to the full-scale launch of HIVE Cloud, we are also pleased to share that our proof-of-concept to utilize our fleet of GPUs is currently produced annual revenue on a run-rate basis over $1 million, doing high performance computing workloads (not involving digital asset mining).

We note that this is at current market conditions approximately 25 times more profitable than mining, on a dollar per MWHR basis, generating over $1,800 per MWHR in revenue. Notably, HIVE is currently realizing these revenues by enlisting approximately 450 GPUs, which consume approximately 80 kW of power, to produce up to $3,500 per day. By comparison, 80 kW of Bitcoin ASIC miners would be producing approximately $175 per day using the same power footprint of 80 kW.

Our operating team, over the last 6 months, have studied the stability, performance and technical requirements, to support HPC workloads with our fleet of data center grade GPUs. This is a notable technical achievement we plan on continuing to scale this project and hope to achieve the 10x growth in our HPC revenue run-rate in the coming year.

Frank Homes, Executive Chairman of HIVE commented, “We have navigated numerous pivots from mining Ethereum with our GPUs, to mining Bitcoin, while also developing our HPC platform to performance HPC work-loads with our GPUs. I am very proud of our team.”

Aydin Kilic CEO of HIVE stated, “This is an evolution of our skillset as a technology company and sets the stage for a new era in HIVE’s outlay of technology services. Where HIVE thrives is understanding and optimizing the unit economics of our business, as we strive to provide value to shareholders, and manage our energy and capital resources in the most efficient manner possible.”

About HIVE Blockchain Technologies Ltd.

HIVE Blockchain Technologies Ltd. went public in 2017 as the first cryptocurrency mining company with a green energy and ESG strategy.

HIVE is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, we are building a bridge between the digital currency and blockchain sector and traditional capital markets. HIVE owns state-of-the-art, green energy-powered data centre facilities in Canada, Sweden, and Iceland, where we source green energy to mine on the cloud and endeavour to build a significant HODL position of Bitcoin. Since the beginning of 2021, HIVE has held in secure storage the majority of its ETH and BTC coin mining rewards. Our shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of cryptocurrencies such as BTC. Because HIVE also owns hard assets such as data centers and advanced multi-use servers, we believe our shares offer investors an attractive way to gain exposure to the cryptocurrency space.

We encourage you to visit HIVE’s YouTube channel here to learn more about HIVE.

For more information and to register to HIVE’s mailing list, please visit www.HIVEblockchain.com. Follow @HIVEblockchain on Twitter and subscribe to HIVE’s YouTube channel.

On Behalf of HIVE Blockchain Technologies Ltd.
“Frank Holmes”
Executive Chairman

For further information please contact:
Frank Holmes
Tel: (604) 664-1078

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-Looking Information

Except for the statements of historical fact, this news release contains “forward-looking information” within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and projections as at the date of this news release. “Forward-looking information” in this news release includes information about: business goals and objectives of the Company; the results of operations for the nine months ended December 31, 2022; the HODL strategy adopted by the Company; the acquisition, deployment and optimization of the mining fleet and equipment; the continued viability of its existing Bitcoin mining operations; the Company’s operations and sustainable future profitability; potential further improvements to the profitability and efficiency across mining operations by optimizing cryptocurrency mining output, continuing to lower direct mining operations cost structure, and maximizing existing electrical and infrastructure capacity including with new mining equipment in existing facilities; continued adoption of Bitcoin globally; the potential for the Company’s long term growth; the business goals and objectives of the Company, and other forward-looking information includes but is not limited to information concerning the intentions, plans and future actions of the parties to the transactions described herein and the terms thereon.

Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the volatility of the digital currency market; the Company’s ability to successfully mine digital currency; the Company may not be able to profitably liquidate its current digital currency inventory as required, or at all; a material decline in digital currency prices may have a significant negative impact on the Company’s operations; the volatility of digital currency prices; continued effects of the COVID-19 pandemic may have a material adverse effect on the Company’s performance as supply chains are disrupted and prevent the Company from carrying out its expansion plans or operating its assets; protection of proprietary rights; the effect of government regulation and compliance on the Company and the industry; network security risks; the ability of the Company to maintain properly working systems; reliance on key personnel; an increase in network difficulty may have a significant negative impact on operations; the anticipated growth and sustainability of hydroelectricity for the purposes of cryptocurrency mining in the applicable jurisdictions; the inability to maintain reliable and economical sources of power for the Company to operate cryptocurrency mining assets; the risks of an increase in the Company’s electricity costs, cost of natural gas, changes in currency exchange rates, energy curtailment or regulatory changes in the energy regimes in the jurisdictions in which the Company operates and the adverse impact on the Company’s profitability; future capital needs and uncertainty of additional financing; the prices at which the Company may sell Common Shares in equity issuances resulting in dilution, as well as capital market conditions in general; the impact of energy curtailment or regulatory changes in the energy regimes in the jurisdictions in which the Company operates; and other related risks as more fully set out in the registration statement of Company and other documents disclosed under the Company’s filings at www.sec.gov/EDGAR and www.sedar.com.

This news release also contains “financial outlook” in the form of gross mining margins, which is intended to provide additional information only and may not be an appropriate or accurate prediction of future performance and should not be used as such. The gross mining margins disclosed in this news release are based on the assumptions disclosed in this news release and the Company’s Management Discussion and Analysis for the fiscal year ended March 31, 2022, which assumptions are based upon management’s best estimates but are inherently speculative and there is no guarantee that such assumptions and estimates will prove to be correct.

The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company’s ability to realize operational efficiencies going forward into profitability; profitable use of the Company’s assets going forward; the Company’s ability to profitably liquidate its digital currency inventory as required; historical prices of digital currencies and the ability of the Company to mine digital currencies will be consistent with historical prices; and there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company’s normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

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Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

The Kraft Heinz Company Declares Regular Quarterly Dividend of $0.40 Per Share

February 15, 2023 07:01 AM Eastern Standard Time PITTSBURGH & CHICAGO–The Kraft Heinz Company (Nasdaq: KHC) announced today that the Company’s Board of Directors declared a regular quarterly dividend of $0.40 per share of common stock payable on March 31, 2023, to stockholders of record as of March 10, 2023.

ABOUT THE KRAFT HEINZ COMPANY

We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious. Consumers are at the center of everything we do. With 2022 net sales of approximately $26 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale. We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of six consumer-driven product platforms. As global citizens, we’re dedicated to making a sustainable, ethical impact while helping feed the world in healthy, responsible ways. Learn more about our journey by visiting www.kraftheinzcompany.com or following us on LinkedIn and Twitter.

Contacts

Alex Abraham (media)
Alex.Abraham@kraftheinz.com

Anne-Marie Megela (investors)
ir@kraftheinz.com

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Kraft Heinz Reports Fourth Quarter and Full Year 2022 Results

Provides Full Year 2023 Outlook for Organic Net Sales⁽¹⁾⁽²⁾, Adjusted EBITDA⁽¹⁾⁽²⁾, and Adjusted EPS⁽¹⁾⁽²⁾

Fourth Quarter Highlights

Net sales increased 10.0%, with Organic Net Sales⁽¹⁾ growth of 10.4%.

Net income/(loss) increased 447.9%. Adjusted EBITDA⁽¹⁾ increased 8.6%.

Diluted EPS was $0.72, up 442.9%. Adjusted EPS⁽¹⁾ was $0.85, up 7.6%.

February 15, 2023 07:00 AM Eastern Standard Time PITTSBURGH & CHICAGO–The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) today reported financial results for the fourth quarter and full year 2022.

“2022 was an incredible year for Kraft Heinz, delivering strong results and ending the fourth quarter with solid momentum that positions us well for 2023,” said Kraft Heinz CEO and Chair of the Board Miguel Patricio. “We continue to see strength driven by our key growth pillars, while at the same time prioritizing investments in our brands and delivering on efficiencies.”

“The results were even more impressive considering the difficult operating environment, with record levels of inflation and supply chain disruptions, to which our teams responded with agility. I am very proud of the entire Kraft Heinz team for a strong year, while continuing to execute on our long-term strategy. We are confident that all the work we’ve done thus far positions us well to accelerate profitable growth and generate attractive returns for our stockholders.”

Net Sales In millions

	Net Sales					Organic Net Sales⁽¹⁾
	December 31, 2022		December 25, 2021		% Chg vs PY	YoY Growth Rate	Price	Volume/ Mix
For the Three Months Ended
North America	$	5,684	$	5,208	9.1%	9.2%	14.2 pp	(5.0) pp
International		1,697		1,501	13.1%	14.3%	18.5 pp	(4.2) pp
Kraft Heinz	$	7,381	$	6,709	10.0%	10.4%	15.2 pp	(4.8) pp

For the Year Ended
North America	$	20,340	$	20,351	(0.1)%	9.2%	13.0 pp	(3.8) pp
International		6,145		5,691	8.0%	11.6%	13.5 pp	(1.9) pp
Kraft Heinz	$	26,485	$	26,042	1.7%	9.8%	13.2 pp	(3.4) pp

Net Income/(Loss) and Diluted EPS
In millions, except per share data
	For the Three Months Ended					For the Year Ended
	December 31, 2022		December 25, 2021		% Chg vs PY	December 31, 2022		December 25, 2021		% Chg vs PY
Gross profit	$	2,364	$	2,162	9.3%	$	8,122	$	8,682	(6.5)%
Operating income/(loss)		1,226		(20)	6,517.7%		3,634		3,460	5.0%
Net income/(loss)		887		(255)	447.9%		2,368		1,024	131.3%
Net income/(loss) attributable to common shareholders		890		(257)	447.2%		2,363		1,012	133.4%
Diluted EPS	$	0.72	$	(0.21)	442.9%	$	1.91	$	0.82	132.9%

Adjusted EPS⁽¹⁾		0.85		0.79	7.6%		2.78		2.93	(5.1)%
Adjusted EBITDA⁽¹⁾	$	1,743	$	1,606	8.6%	$	6,003	$	6,371	(5.8)%

Q4 2022 Financial Summary

Net sales increased 10.0 percent versus the year-ago period to $7.4 billion, including a positive 7.1 percentage point impact from a 53rd week, a negative 4.6 percentage point impact from divestitures and acquisitions, and a negative 2.9 percentage point impact from currency. Organic Net Sales increased 10.4 percent versus the prior year period. Price increased 15.2 percentage points versus the prior year period, with increases in both reportable segments primarily driven by price increases to mitigate rising input costs. Volume/mix declined 4.8 percentage points versus the prior year period, with declines in both reportable segments that were primarily driven by supply constraints and elasticity impacts from pricing actions.

Net income/(loss) increased 447.9 percent versus the year-ago period to $887 million, primarily driven by non-cash impairment losses in the prior year period, lower interest expense primarily due to debt extinguishment costs in the prior year period, and higher Adjusted EBITDA versus the prior year period. These factors were partially offset by higher tax expense, an accrual related to the previously disclosed securities class action lawsuit, and unfavorable changes in other expense/(income). Adjusted EBITDA increased 8.6 percent versus the year-ago period to $1.7 billion, including a positive 7.4 percentage point impact from a 53rd week, a negative 4.9 percentage point impact from divestitures and acquisitions, and a negative 2.1 percentage point impact from currency. The remaining year-over-year increase in Adjusted EBITDA is a result of higher pricing and efficiency gains that more than offset higher supply chain costs (reflecting inflationary pressure in procurement, logistics, and manufacturing costs), higher commodity costs (mainly in dairy, packaging materials, energy, and soybean and vegetable oils), as well as unfavorable volume/mix.

Diluted EPS was $0.72, up 442.9% versus the prior year period, driven by the net income/(loss) factors discussed above. Adjusted EPS⁽¹⁾ was $0.85, up 7.6 percent versus the prior year period, primarily driven by results of ongoing operations, a 53rd week, and lower interest expense versus the prior year period. These factors were partially offset by a negative $0.05 impact from divestitures and unfavorable changes in other expense/(income).

FY 2022 Financial Summary

Net Sales increased 1.7 percent versus the year-ago period to $26.5 billion, including a negative 8.0 percentage point impact from divestitures and acquisitions, a negative 2.0 percentage point impact from currency, and a positive 1.9 percentage point impact from a 53rd week. Organic Net Sales increased 9.8 percent versus the prior year period. Price increased 13.2 percentage points versus the prior year period, with increases in both reportable segments primarily driven by price increases to mitigate rising input costs. Volume/mix declined 3.4 percentage points versus the prior year period, with declines in both reportable segments that were primarily driven by supply constraints and elasticity impacts from pricing actions.

Net income/(loss) increased 131.3 percent versus the year-ago period to $2.4 billion, driven by lower interest expense primarily due to debt extinguishment costs in the prior year period and lower non-cash impairment losses in the current year period. These factors were partially offset by lower Adjusted EBITDA versus the prior year period and an accrual related to the previously disclosed securities class action lawsuit. Adjusted EBITDA decreased 5.8 percent versus the year-ago period to $6.0 billion, including a negative 6.1 percentage point impact from divestitures and acquisitions, a negative 1.3 percentage point impact from currency, and a positive 1.9 percentage point impact from a 53rd week. The remaining year-over-year decrease in Adjusted EBITDA is primarily a result of higher supply chain costs (reflecting inflationary pressure in procurement, logistics, and manufacturing costs), higher commodity costs (mainly in dairy, packaging materials, soybean and vegetable oils, energy, and meat), and unfavorable volume/mix. These impacts were offset by higher pricing and efficiency gains.

Diluted EPS was $1.91, up 132.9 percent versus the prior year period, primarily driven by the net income/(loss) factors discussed above. Adjusted EPS was $2.78, down 5.1 percent versus the prior year period, primarily driven by a negative $0.26 impact from divestitures, higher taxes on adjusted earnings, and unfavorable changes in other expense/(income). These factors were partially offset by lower interest expense and a 53rd week.

Year-to-date net cash provided by operating activities was $2.5 billion, down 54.0 percent versus the year-ago period, primarily driven by one-time proceeds from the sale of licenses in connection with the Cheese Transaction in the prior year period, higher cash outflows for inventories primarily related to stock rebuilding, increased input costs, and the acceleration of payments to suppliers attributed to the wind-down of existing product financing arrangements, and lower Adjusted EBITDA. These impacts were partially offset by lower cash outflows for interest, primarily due to prior year reduction of long-term debt. Year-to date Free Cash Flow⁽¹⁾was $1.6 billion, down 65.2 percent versus the comparable prior year period due to the same drivers of net cash provided by operating activities.

Outlook

The Company expects 2023 Organic Net Sales⁽¹⁾⁽²⁾ growth of 4 to 6 percent versus 2022. Constant Currency Adjusted EBITDA⁽¹⁾⁽²⁾ growth from 2022 to 2023 is expected to range between 2 to 4 percent, or 4 to 6 percent when excluding the impact from the 53rd week in 2022.

The Company anticipates high single-digit inflation for the year, with pricing and gross efficiencies contributing to Adjusted Gross Profit Margin⁽¹⁾⁽²⁾ recovery. Adjusted Gross Profit Margin expansion is expected to fund incremental investments across technology, marketing, and people.

Adjusted EPS⁽¹⁾⁽²⁾ is expected to be $2.67 to $2.75, which includes approximately a $0.04 negative impact from expected unfavorable changes in non-cash pension and post-retirement benefits, and a $0.04 currency headwind at current foreign exchange rates. The expected 2023 year-over-year Adjusted EPS performance reflects a negative $0.06 impact from lapping the 53rd week in 2022.

End Notes

(1)		Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted EPS, Adjusted Gross Profit Margin and Free Cash Flow are non-GAAP financial measures. Please see discussion of non-GAAP financial measures and the reconciliations at the end of this press release for more information.

(2)		Guidance for Organic Net Sales, Constant Currency Adjusted EBITDA, Adjusted EPS, and Adjusted Gross Margin is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of such items impacting comparability, including, but not limited to, the impact of currency, acquisitions and divestitures, divestiture-related license income, restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, equity award compensation expense, nonmonetary currency devaluation, and debt prepayment and extinguishment (benefit)/costs, among other items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the Company is unable to provide a reconciliation of these measures without unreasonable effort.

Earnings Discussion and Webcast Information

A pre-recorded management discussion of The Kraft Heinz Company’s fourth quarter and full year 2022 earnings is available at ir.kraftheinzcompany.com. The Company will host a live question and answer session beginning today at 9:00 a.m. Eastern Standard Time. A webcast of the session will be accessible at ir.kraftheinzcompany.com.

ABOUT THE KRAFT HEINZ COMPANY

Forward-Looking Statements

This press release contains a number of forward-looking statements. Words such as “provide,” “deliver,’ “see,” “drive,” “accelerate,” “execute,” “generate,” “anticipate,” “believe,” “continue,” “could,” “expect,” “plan,” “will,” “guidance,” and “outlook,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the Company’s plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, dividends, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, and pipeline. These forward-looking statements reflect management’s current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company’s control.

Important factors that may affect the Company’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, operating in a highly competitive industry; the Company’s ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; changes in the retail landscape or the loss of key retail customers; changes in the Company’s relationships with significant customers or suppliers, or in other business relationships; the Company’s ability to maintain, extend, and expand its reputation and brand image; the Company’s ability to leverage its brand value to compete against private label products; the Company’s ability to drive revenue growth in its key product categories or platforms, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or other product liability claims; climate change and legal or regulatory responses; the Company’s ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; the Company’s ability to successfully execute its strategic initiatives; the impacts of the Company’s international operations; the Company’s ability to protect intellectual property rights; the Company’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the influence of the Company’s largest stockholder; the Company’s level of indebtedness, as well as our ability to comply with covenants under our debt instruments; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; compliance with laws and regulations and related legal claims or regulatory enforcement actions; failure to maintain an effective system of internal controls; a downgrade in the Company’s credit rating; the impact of sales of the Company’s common stock in the public market; the Company’s ability to continue to pay a regular dividend and the amounts of any such dividends; disruptions in the global economy caused by geopolitical conflicts, including the ongoing conflict between Russia and Ukraine; unanticipated business disruptions and natural events in the locations in which the Company or the Company’s customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and in various other nations where the Company does business (including inflationary pressures, general economic slowdown, or recession); changes in the Company’s management team or other key personnel and the Company’s ability to hire or retain key personnel or a highly skilled and diverse global workforce; our dependence on information technology and systems, including service interruptions, misappropriation of data, or breaches of security; increased pension, labor, and people-related expenses; changes in tax laws and interpretations; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect the Company’s forward-looking statements, see the Company’s risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission. The Company disclaims and does not undertake any obligation to update, revise, or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.

Non-GAAP Financial Measures

The non-GAAP financial measures provided in this press release should be viewed in addition to, and not as an alternative for, results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

To supplement the financial information provided, the Company has presented Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Adjusted Gross Profit, and Adjusted Net Income/(Loss), which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable GAAP financial measures, such as net sales, net income/(loss), gross profit, diluted earnings per share (“EPS”), net cash provided by/(used for) operating activities, or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures.

Management uses these non-GAAP financial measures to assist in comparing the Company’s performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s underlying operations. The Company believes:

Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
Free Cash Flow provides a measure of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and is one factor used in determining the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes.

Management believes that presenting the Company’s non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting the Company’s business than could be obtained absent these disclosures.

Definitions

Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. The Company calculates the impact of currency on net sales by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which the Company calculates the previous year’s results using the current year’s exchange rate.

Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, the Company excludes, when they occur, the impacts of divestiture-related license income (e.g., income related to the sale of licenses in connection with the Cheese Transaction), restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities). The Company also presents Adjusted EBITDA on a constant currency basis (Constant Currency Adjusted EBITDA). The Company calculates the impact of currency on Adjusted EBITDA by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which it calculates the previous year’s results using the current year’s exchange rate.

Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS are defined as gross profit, net income/(loss), and diluted earnings per share, respectively, excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis.

Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.

					Schedule 1
The Kraft Heinz Company Consolidated Statements of Income (in millions, except per share data) (Unaudited)
	For the Three Months Ended				For the Year Ended
	December 31, 2022		December 25, 2021		December 31, 2022		December 25, 2021
Net sales	$	7,381	$	6,709	$	26,485	$	26,042
Cost of products sold		5,017		4,547		18,363		17,360
Gross profit		2,364		2,162		8,122		8,682
Selling, general and administrative expenses, excluding impairment losses		1,138		891		3,575		3,588
Goodwill impairment losses		—		53		444		318
Intangible asset impairment losses		—		1,238		469		1,316
Selling, general and administrative expenses		1,138		2,182		4,488		5,222
Operating income/(loss)		1,226		(20)		3,634		3,460
Interest expense		217		604		921		2,047
Other expense/(income)		(42)		(104)		(253)		(295)
Income/(loss) before income taxes		1,051		(520)		2,966		1,708
Provision for/(benefit from) income taxes		164		(265)		598		684
Net income/(loss)		887		(255)		2,368		1,024
Net income/(loss) attributable to noncontrolling interest		(3)		2		5		12
Net income/(loss) attributable to common shareholders	$	890	$	(257)	$	2,363	$	1,012

Basic shares outstanding		1,226		1,225		1,226		1,224
Diluted shares outstanding		1,233		1,225		1,235		1,236

Per share data applicable to common shareholders:
Basic earnings/(loss) per share	$	0.73	$	(0.21)	$	1.93	$	0.83
Diluted earnings/(loss) per share		0.72		(0.21)		1.91		0.82

											Schedule 2
The Kraft Heinz Company Reconciliation of Net Sales to Organic Net Sales For the Three Months Ended (dollars in millions) (Unaudited)
	Net Sales		Currency		Acquisitions and Divestitures		53rd Week		Organic Net Sales		Price	Volume/Mix
December 31, 2022
North America	$	5,684	$	(35)	$	—	$	357	$	5,362
International		1,697		(143)		71		97		1,672
Kraft Heinz	$	7,381	$	(178)	$	71	$	454	$	7,034

December 25, 2021
North America	$	5,208	$	—	$	297	$	—	$	4,911
International		1,501		12		26		—		1,463
Kraft Heinz	$	6,709	$	12	$	323	$	—	$	6,374

Year-over-year growth rates

North America

9.1%

(0.7) pp

(6.6) pp

7.2 pp

9.2%

14.2 pp

(5.0) pp

International

13.1%

(10.5) pp

2.6 pp

6.7 pp

14.3%

18.5 pp

(4.2) pp

Kraft Heinz

10.0%

(2.9) pp

(4.6) pp

7.1 pp

10.4%

15.2 pp

(4.8) pp

											Schedule 3
The Kraft Heinz Company Reconciliation of Net Sales to Organic Net Sales For the Year Ended (dollars in millions) (Unaudited)
	Net Sales		Currency		Acquisitions and Divestitures		53rd Week		Organic Net Sales		Price	Volume/Mix
December 31, 2022
North America	$	20,340	$	(67)	$	—	$	357	$	20,050
International		6,145		(430)		279		97		6,199
Kraft Heinz	$	26,485	$	(497)	$	279	$	454	$	26,249

December 25, 2021
North America	$	20,351	$	—	$	1,990	$	—	$	18,361
International		5,691		26		109		—		5,556
Kraft Heinz	$	26,042	$	26	$	2,099	$	—	$	23,917

Year-over-year growth rates

North America

(0.1)%

(0.4) pp

(10.8) pp

1.9 pp

9.2%

13.0 pp

(3.8) pp

International

8.0%

(8.1) pp

2.8 pp

1.7 pp

11.6%

13.5 pp

(1.9) pp

Kraft Heinz

1.7%

(2.0) pp

(8.0) pp

1.9 pp

9.8%

13.2 pp

(3.4) pp

	Schedule 4
The Kraft Heinz Company Reconciliation of Net Income/(Loss) to Adjusted EBITDA (dollars in millions) (Unaudited)
	For the Three Months Ended				For the Year Ended
	December 31, 2022		December 25, 2021		December 31, 2022		December 25, 2021
Net income/(loss)	$	887	$	(255)	$	2,368	$	1,024
Interest expense		217		604		921		2,047
Other expense/(income)		(42)		(104)		(253)		(295)
Provision for/(benefit from) income taxes		164		(265)		598		684
Operating income/(loss)		1,226		(20)		3,634		3,460
Depreciation and amortization (excluding restructuring activities)		246		233		922		910
Divestiture-related license income		(15)		(4)		(56)		(4)
Restructuring activities		36		32		74		84
Deal costs		1		3		9		11
Unrealized losses/(gains) on commodity hedges		(2)		29		63		17
Impairment losses		—		1,291		999		1,634
Certain non-ordinary course legal and regulatory matters		210		—		210		62
Equity award compensation expense		41		42		148		197
Adjusted EBITDA	$	1,743	$	1,606	$	6,003	$	6,371

Segment Adjusted EBITDA:
North America	$	1,550	$	1,445	$	5,284	$	5,576
International		284		245		1,017		1,066
General corporate expenses		(91)		(84)		(298)		(271)
Adjusted EBITDA	$	1,743	$	1,606	$	6,003	$	6,371

					Schedule 5
The Kraft Heinz Company Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA For the Three Months Ended (dollars in millions) (Unaudited)
	Adjusted EBITDA		Currency		Constant Currency Adjusted EBITDA
December 31, 2022
North America	$	1,550	$	(8)	$	1,558
International		284		(26)		310
General corporate expenses		(91)		2		(93)
Kraft Heinz	$	1,743	$	(32)	$	1,775

December 25, 2021
North America	$	1,445	$	—	$	1,445
International		245		2		243
General corporate expenses		(84)		—		(84)
Kraft Heinz	$	1,606	$	2	$	1,604

Year-over-year growth rates
North America	7.3%	(0.5) pp	7.8%
International	16.0%	(12.0) pp	28.0%
General corporate expenses	8.3%	(3.2) pp	11.5%
Kraft Heinz	8.6%	(2.1) pp	10.7%

					Schedule 6
The Kraft Heinz Company Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA For the Year Ended (dollars in millions) (Unaudited)
	Adjusted EBITDA		Currency		Constant Currency Adjusted EBITDA
December 31, 2022
North America	$	5,284	$	(14)	$	5,298
International		1,017		(71)		1,088
General corporate expenses		(298)		9		(307)
Kraft Heinz	$	6,003	$	(76)	$	6,079

December 25, 2021
North America	$	5,576	$	—	$	5,576
International		1,066		6		1,060
General corporate expenses		(271)		—		(271)
Kraft Heinz	$	6,371	$	6	$	6,365

Year-over-year growth rates
North America	(5.2)%	(0.2) pp	(5.0)%
International	(4.6)%	(7.2) pp	2.6%
General corporate expenses	9.8%	(3.5) pp	13.3%
Kraft Heinz	(5.8)%	(1.3) pp	(4.5)%

																			Schedule 7
The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited)
	For the Three Months Ended
	December 31, 2022
	Gross profit		Selling, general and administrative expenses		Operating income/ (loss)		Interest expense		Other expense/ (income)		Income/ (loss) before income taxes		Provision for/ (benefit from) income taxes		Net income/(loss)		Net income/(loss) attributable to noncontrolling interest		Net income/(loss) attributable to common shareholders		Diluted EPS
GAAP Results	$	2,364	$	1,138	$	1,226	$	217	$	(42)	$	1,051	$	164	$	887	$	(3)	$	890	$	0.72
Items Affecting Comparability
Restructuring activities		12		(24)		36		—		(1)		37		9		28		—		28		0.02
Deal Costs		—		(1)		1		—		—		1		1		—		—		—		—
Unrealized losses/(gains) on commodity hedges		(2)		—		(2)		—		—		(2)		(1)		(1)		—		(1)		—
Certain non-ordinary course legal and regulatory matters		—		(210)		210		—		—		210		49		161		—		161		0.13
Losses/(gains) on sale of business		—		—		—		—		24		(24)		(15)		(9)		—		(9)		(0.01)
Nonmonetary currency devaluation		—		—		—		—		(1)		1		—		1		—		1		—
Debt prepayment and extinguishment (benefit)/costs		—		—		—		26		—		(26)		(7)		(19)		—		(19)		(0.01)
Adjusted Non-GAAP Results	$	2,374													$	1,048					$	0.85

																			Schedule 8
The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited)
	For the Three Months Ended
	December 25, 2021
	Gross profit		Selling, general and administrative expenses		Operating income/ (loss)		Interest expense		Other expense/ (income)		Income/ (loss) before income taxes		Provision for/ (benefit from) income taxes		Net income/(loss)		Net income/(loss) attributable to noncontrolling interest		Net income/(loss) attributable to common shareholders		Diluted EPS
GAAP Results	$	2,162	$	2,182	$	(20)	$	604	$	(104)	$	(520)	$	(265)	$	(255)	$	2	$	(257)	$	(0.21)
Items Affecting Comparability
Restructuring activities		9		(22)		31		—		(1)		32		8		24		—		24		0.02
Deal Costs		—		(3)		3		—		—		3		1		2		—		2		—
Unrealized losses/(gains) on commodity hedges		29		—		29		—		—		29		7		22		—		22		0.02
Impairment losses		—		(1,291)		1,291		—		—		1,291		290		1,001		—		1,001		0.81
Losses/(gains) on sale of business		—		—		—		—		33		(33)		66		(99)		—		(99)		(0.08)
Nonmonetary currency devaluation		—		—		—		—		4		(4)		—		(4)		—		(4)		—
Debt prepayment and extinguishment (benefit)/costs		—		—		—		(346)		—		346		68		278		—		278		0.23
Adjusted Non-GAAP Results	$	2,200													$	969					$	0.79

																			Schedule 9
The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited)
	For the Year Ended
	December 31, 2022
	Gross profit		Selling, general and administrative expenses		Operating income/ (loss)		Interest expense		Other expense/ (income)		Income/ (loss) before income taxes		Provision for/ (benefit from) income taxes		Net income/(loss)		Net income/(loss) attributable to noncontrolling interest		Net income/(loss) attributable to common shareholders		Diluted EPS
GAAP Results	$	8,122	$	4,488	$	3,634	$	921	$	(253)	$	2,966	$	598	$	2,368	$	5	$	2,363	$	1.91
Items Affecting Comparability
Restructuring activities		27		(47)		74		—		—		74		18		56		—		56		0.05
Deal Costs		—		(9)		9		—		—		9		4		5		—		5		—
Unrealized losses/(gains) on commodity hedges		63		—		63		—		—		63		15		48		—		48		0.04
Impairment losses		86		(913)		999		—		—		999		132		867		—		867		0.70
Certain non-ordinary course legal and regulatory matters		—		(210)		210		—		—		210		49		161		—		161		0.13
Losses/(gains) on sale of business		—		—		—		—		25		(25)		(8)		(17)		—		(17)		(0.01)
Other losses/(gains) related to acquisitions and divestitures		—		—		—		—		38		(38)		(9)		(29)		—		(29)		(0.02)
Nonmonetary currency devaluation		—		—		—		—		(17)		17		—		17		—		17		0.01
Debt prepayment and extinguishment (benefit)/costs		—		—		—		38		—		(38)		(3)		(35)		—		(35)		(0.03)
Adjusted Non-GAAP Results	$	8,298													$	3,441					$	2.78

																			Schedule 10
The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited)
	For the Year Ended
	December 25, 2021
	Gross profit		Selling, general and administrative expenses		Operating income/ (loss)		Interest expense		Other expense/ (income)		Income/ (loss) before income taxes		Provision for/ (benefit from) income taxes		Net income/(loss)		Net income/(loss) attributable to noncontrolling interest		Net income/(loss) attributable to common shareholders		Diluted EPS
GAAP Results	$	8,682	$	5,222	$	3,460	$	2,047	$	(295)	$	1,708	$	684	$	1,024	$	12	$	1,012	$	0.82
Items Affecting Comparability
Restructuring activities		13		(70)		83		—		(1)		84		20		64		—		64		0.05
Deal Costs		—		(11)		11		—		—		11		7		4		—		4		—
Unrealized losses/(gains) on commodity hedges		17		—		17		—		—		17		4		13		—		13		0.01
Impairment losses		—		(1,634)		1,634		—		—		1,634		310		1,324		—		1,324		1.07
Certain non-ordinary course legal and regulatory matters		—		(62)		62		—		—		62		—		62		—		62		0.05
Losses/(gains) on sale of business		—		—		—		—		44		(44)		(225)		181		—		181		0.15
Debt prepayment and extinguishment (benefit)/costs		—		—		—		(917)		—		917		189		728		—		728		0.59
Certain significant discrete income tax items		—		—		—		—		—		—		(235)		235		—		235		0.19
Adjusted Non-GAAP Results	$	8,712													$	3,635					$	2.93

	Schedule 11
The Kraft Heinz Company Key Drivers of Change in Adjusted EPS (Unaudited)
	For the Three Months Ended
	December 31, 2022		December 25, 2021		$ Change
Key drivers of change in Adjusted EPS:
Results of operations^(a)(b)	$	0.95	$	0.87	$	0.08
Results of divested operations		—		0.05		(0.05)
53rd week		0.06		—		0.06
Interest expense		(0.16)		(0.18)		0.02
Other expense/(income)		0.02		0.05		(0.03)
Effective tax rate		(0.01)		—		(0.01)
Effect of dilutive equity awards^(c)		(0.01)		—		(0.01)
Adjusted EPS	$	0.85	$	0.79	$	0.06

(a)		Includes non-cash amortization of definite-lived intangible assets, which accounted for a negative impact to Adjusted EPS from results of operations of $0.05 for the three months ended December 31, 2022 and $0.04 for the three months ended December 25, 2021.
(b)		Includes divestiture-related license income, which accounted for a benefit to Adjusted EPS from results of operations of $0.01 for the three months ended December 31, 2022.
(c)		Represents the impact of excluding the dilutive equity awards for the three months ended December 25, 2021, as their inclusion would have had an anti-dilutive effect on EPS due to net losses attributable to common shareholders for the same period.

	Schedule 12
The Kraft Heinz Company Key Drivers of Change in Adjusted EPS (Unaudited)
	For the Year Ended
	December 31, 2022		December 25, 2021		$ Change
Key drivers of change in Adjusted EPS:
Results of operations^(a)(b)	$	3.26	$	3.25	$	0.01
Results of divested operations		0.01		0.27		(0.26)
53rd week		0.06		—		0.06
Interest expense		(0.63)		(0.76)		0.13
Other expense/(income)^(c)		0.14		0.17		(0.03)
Effective tax rate		(0.06)		—		(0.06)
Adjusted EPS	$	2.78	$	2.93	$	(0.15)

(a)		Includes non-cash amortization of definite-lived intangible assets, which accounted for a negative impact to Adjusted EPS from results of operations of $0.18 in 2022 and $0.16 in 2021.
(b)		Includes divestiture-related license income, which accounted for a benefit to Adjusted EPS from results of operations of $0.04 in 2022.
(c)		Includes non-cash amortization of prior service credits, which accounted for a benefit to Adjusted EPS from other expense/(income) of $0.01 in 2022 and 2021.

			Schedule 13
The Kraft Heinz Company Consolidated Balance Sheets (in millions, except per share data) (Unaudited)
	December 31, 2022		December 25, 2021
ASSETS
Cash and cash equivalents	$	1,040	$	3,445
Trade receivables, net		2,120		1,957
Inventories		3,651		2,729
Prepaid expenses		240		136
Other current assets		842		716
Assets held for sale		4		11
Total current assets		7,897		8,994
Property, plant and equipment, net		6,740		6,806
Goodwill		30,833		31,296
Intangible assets, net		42,649		43,542
Other non-current assets		2,394		2,756
TOTAL ASSETS	$	90,513	$	93,394
LIABILITIES AND EQUITY
Commercial paper and other short-term debt	$	6	$	14
Current portion of long-term debt		831		740
Trade payables		4,848		4,753
Accrued marketing		749		804
Interest payable		264		268
Income taxes payable		136		541
Other current liabilities		2,194		1,944
Total current liabilities		9,028		9,064
Long-term debt		19,233		21,061
Deferred income taxes		10,152		10,536
Accrued postemployment costs		144		205
Long-term deferred income		1,477		1,534
Other non-current liabilities		1,609		1,542
TOTAL LIABILITIES		41,643		43,942
Redeemable noncontrolling interest		40		4
Equity:
Common stock, $0.01 par value		12		12
Additional paid-in capital		51,834		53,379
Retained earnings/(deficit)		489		(1,682)
Accumulated other comprehensive income/(losses)		(2,810)		(1,824)
Treasury stock, at cost		(847)		(587)
Total shareholders’ equity		48,678		49,298
Noncontrolling interest		152		150
TOTAL EQUITY		48,830		49,448
TOTAL LIABILITIES AND EQUITY	$	90,513	$	93,394

	Schedule 14
The Kraft Heinz Company Consolidated Statements of Cash Flows (in millions) (Unaudited)
	For the Year Ended
	December 31, 2022		December 25, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$	2,368	$	1,024
Adjustments to reconcile net income/(loss) to operating cash flows:
Depreciation and amortization		933		910
Amortization of postemployment benefit plans prior service costs/(credits)		(14)		(7)
Divestiture-related license income		(56)		(4)
Equity award compensation expense		148		197
Deferred income tax provision/(benefit)		(278)		(1,042)
Postemployment benefit plan contributions		(23)		(27)
Goodwill and intangible asset impairment losses		913		1,634
Nonmonetary currency devaluation		17		—
Loss/(gain) on sale of business		(25)		(44)
Proceeds from sale of license		—		1,587
Loss/(gain) on extinguishment of debt		(38)		917
Other items, net		7		(187)
Changes in current assets and liabilities:
Trade receivables		(228)		87
Inventories		(1,121)		(144)
Accounts payable		152		408
Other current assets		(314)		(32)
Other current liabilities		28		87
Net cash provided by/(used for) operating activities		2,469		5,364
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(916)		(905)
Payments to acquire business, net of cash acquired		(481)		(74)
Settlement of net investment hedges		208		(28)
Proceeds from sale of business, net of cash disposed and working capital adjustments		88		5,014
Other investing activities, net		10		31
Net cash provided by/(used for) investing activities		(1,091)		4,038
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt		(1,465)		(6,202)
Debt prepayment and extinguishment benefit/(costs)		10		(924)
Proceeds from issuance of commercial paper		228		—
Repayments of commercial paper		(228)		—
Dividends paid		(1,960)		(1,959)
Other financing activities, net		(299)		(259)
Net cash provided by/(used for) financing activities		(3,714)		(9,344)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(69)		(30)
Cash, cash equivalents, and restricted cash
Net increase/(decrease)		(2,405)		28
Balance at beginning of period		3,446		3,418
Balance at end of period	$	1,041	$	3,446

			Schedule 15
The Kraft Heinz Company Reconciliation of Net Cash Provided By/(Used for) Operating Activities to Free Cash Flow (in millions) (Unaudited)
	For the Year Ended
	December 31, 2022		December 25, 2021
Net cash provided by/(used for) operating activities	$	2,469	$	5,364
Capital expenditures		(916)		(905)
Free Cash Flow	$	1,553	$	4,459

Contacts

Alex Abraham (media)
Alex.Abraham@kraftheinz.com

Anne-Marie Megela (investors)
ir@kraftheinz.com

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