Author Topic: KHC - Kraft Heinz Co.  (Read 37123 times)

portfolio14

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Re: KHC - Kraft Heinz Co.
« Reply #10 on: July 13, 2015, 07:56:10 PM »
I don't think all the large brands are dying, but they are definitely losing market share to private labels. I'm pretty sure there was a similar dip in market share at other times in their history. Higher inflation and market share stability or small gains could make this a decent investment (especially at a lower price).

Are you referring to a cyclical swing or a permanent change of consumer preference. I think human psychology doesn't change.


fareastwarriors

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Re: KHC - Kraft Heinz Co.
« Reply #11 on: November 04, 2015, 05:42:00 PM »
Kraft to Slash 2,600 More Jobs, Close Seven Plants

Company announces more job cuts amid plant closures; had also planned to sharply cut into its white-collar workforce


http://www.wsj.com/articles/kraft-to-slash-2-600-more-jobs-close-seven-plants-1446668634

Own The Rails

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Re: KHC - Kraft Heinz Co.
« Reply #12 on: December 17, 2015, 10:18:51 PM »
Has anyone taken another look at this? It's currently trading right around where it debuted. I figure it's worth some discussion as it's now Buffett's second-largest position after WFC.

LongTermView

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Re: KHC - Kraft Heinz Co.
« Reply #13 on: March 05, 2016, 12:16:26 PM »
Berkshire's 2015 annual report says this:
Quote
That leaves us with our Kraft Heinz holding carried on our balance sheet at a value many billions above our cost and many billions below its market value, an outcome only an accountant could love.

The balance sheet shows $23.4 billion under Investments in The Kraft Heinz Company and Note 6 on page 51 breaks it down as $15.7 billion common + $7.7 billion preferred.

If the balance sheet showed the market value of this investment then what would it be?

The annual report says they own 325.4 million shares of khc and the Dec 31 price was $72.76 so that comes to $23.7 billion.

If the balance sheet showed market value then would it be $31.4 billion which is $23.7 billion common + $7.7 billion preferred?

globalfinancepartners

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Re: KHC - Kraft Heinz Co.
« Reply #14 on: March 05, 2016, 03:28:13 PM »
The preferred will be redeemed in July for $8.32 Billion, so that would be close to the fair value if there was a quoted price.  The shares would be marked at market minus the tax liability.

LongTermView

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Re: KHC - Kraft Heinz Co.
« Reply #15 on: March 07, 2016, 02:55:19 PM »
The shares would be marked at market minus the tax liability.
Does my $23.7 billion number sound right for the common shares market price apart from taxes?

Would taxes be part of the $63.1 billion of deferred taxes on the liability side of the balance sheet?

globalfinancepartners

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Re: KHC - Kraft Heinz Co.
« Reply #16 on: March 07, 2016, 03:22:55 PM »
Hello - they account for Kraft Heinz using the equity method.  But if they owned a smaller percentage and did not use equity method accounting the math would be 325.4 million shares x current market price ($76.50), which is currently $24.893 Billion worth of common.  The deferred capital gains tax liability on the common would then hang out in deferred tax liability on the balance sheet.  Some say, a form of 'float' since it is unlikely to be paid out.

LongTermView

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Re: KHC - Kraft Heinz Co.
« Reply #17 on: March 08, 2016, 08:30:30 AM »
Got it, makes sense.  If they owned a smaller percentage such that they didn't use the equity method then the common shares portion of the asset would show as $23.7 billion as of Dec 31 and $24.9 billion as of yesterday with tax implications lumped into deferred taxes on the liability side.

I guess they got to the common shares value of $15.7 billion with the equity method by starting with the initial investment at cost and then adding their percent of retained earnings over time.  If anyone has the breakdown of the specific numbers that led to the $15.7 billion figure then I'd like to see it.

Thanks.
« Last Edit: March 08, 2016, 08:36:53 AM by LongTermView »

ugadawg_98

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Re: KHC - Kraft Heinz Co.
« Reply #18 on: April 23, 2016, 01:16:57 PM »
I expect a very favorable bond offering in next 60 days or so to redeem BRK's 9% preferred. Should be a positive catalyst for credit, analysts, etc.

globalfinancepartners

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Re: KHC - Kraft Heinz Co.
« Reply #19 on: May 25, 2016, 03:38:45 PM »
Here is the bond offering you were looking for.  Great rates.  Too bad for BRK but they knew it was coming.  Another $8.3 Billion headed to BRK's cash account on June 7th...

http://www.sec.gov/Archives/edgar/data/1637459/000119312516602356/d102086d8k.htm

I expect a very favorable bond offering in next 60 days or so to redeem BRK's 9% preferred. Should be a positive catalyst for credit, analysts, etc.