~~Nina Barton~~ became Zone President of Canada and President of Digital Growth effective January 1, 2019. Prior to assuming her current role, Ms. Barton had served as President, Global Digital and Online Growth since October 2017, and from July 2015 through October 2017, she served as Senior Vice President of Marketing, Innovation and Research & Development for the U.S. business. From July 2013 through July 2015, she served as Vice President, Marketing at Kraft Foods Group, Inc. and managed the total coffee portfolio including the ~~Maxwell House~~, ~~Gevalia,~~ ~~and~~ ~~McCafe~~ ~~brands. Ms. Barton joined Kraft Foods in 2011 as Senior Marketing Director responsible for growing the~~ ~~Philadelphia~~ ~~cream cheese brand. Prior to that, Ms. Barton served in a variety of marketing and brand-building roles in the consumer products industry.~~

~~Paulo Basilio~~ assumed his current role as President of the U.S. Commercial Business in October 2017. Mr. Basilio previously served as Executive Vice President and Chief Financial Officer upon the closing of the 2015 Merger until October 2017. He had previously served as Chief Financial Officer of Heinz since June 2013. Previously, Mr. Basilio served as Chief Executive Officer of ALL from September 2010 to June 2012, after having served in various roles at ALL, including Chief Operating Officer, Chief Financial Officer, and Analyst. Mr. Basilio has also been a partner of 3G Capital since July 2012.

~~Pedro Drevon~~ assumed his current role as Zone President of Latin America in October 2017. Previously he served as Managing Director for Kraft Heinz Brazil since August 2015. Prior to joining Kraft Heinz in 2015, Mr. Drevon served in various capacities at 3G Capital. Before joining 3G Capital in 2008, Mr. Drevon served in various roles at Banco BBM, a financial advisory and wealth management firm. Mr. Drevon has also been a partner of 3G Capital since January 2011.

~~Rashida La Lande~~ joined Kraft Heinz as Senior Vice President, Global General Counsel and Corporate Secretary in January 2018. In October 2018, Ms. La Lande’s responsibilities expanded to include leadership of our corporate social responsibility and government affairs functions, and she was later appointed Head of Corporate Social Responsibility and Government Affairs in addition to her role as Senior Vice President, Global General Counsel and Corporate Secretary. Prior to joining Kraft Heinz, Ms. La Lande was a partner at the law firm of Gibson, Dunn & Crutcher, where she advised clients with respect to mergers and acquisitions, leveraged buyouts, private equity deals, and joint ventures. Throughout Ms. La Lande’s career, she has advised companies and private equity sponsors in the consumer products, retail, financial services, and technology industries.

~~Rafael Oliveira~~ assumed his current role as Zone President of EMEA in October 2016 after serving as the Managing Director of Kraft Heinz UK & Ireland. Mr. Oliveira joined Kraft Heinz in July 2014 and served as President of Kraft Heinz Australia, New Zealand, and Papua New Guinea until September 2016. Prior to joining Kraft Heinz, Mr. Oliveira spent 17 years in the financial industry, the final 10 of which he held a variety of leadership positions with Goldman Sachs.

~~Rodrigo Wickbold~~ assumed his current role as Zone President of APAC in January 2018 after serving as Chief Marketing Officer of APAC since January 2016. Prior to joining Kraft Heinz in January 2016, Mr. Wickbold served in various marketing and business leadership roles at Unilever, a consumer products company, since 2000, including as Global Senior Brand Manager - Skin Care.

Available Information

Our website address is www.kraftheinzcompany.com. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the ~~Securities and Exchange Commission (the “SEC”).~~SEC. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), are available free of charge on our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Kraft Heinz, that are electronically filed with the SEC.

Item 1A. Risk Factors.

Our business is subject to various risks and uncertainties. In addition to the risks described elsewhere in this Annual Report on Form 10-K, any of the risks and uncertainties described below could materially adversely affect our business, financial condition, and results of operations and should be considered when evaluating Kraft Heinz. Although the risks are organized and described separately, many of the risks are interrelated. While we believe we have identified and discussed the material risks affecting our business below, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be material that may adversely affect our business, performance, or financial condition in the future.

Industry Risks

The continuously changing and uncertain COVID-19 pandemic, and government and consumer responses, could negatively impact our business and results of operations.

The ongoing spread of COVID-19 throughout the United States and internationally, as well as measures implemented by governmental authorities and private businesses in an attempt to minimize transmission of the virus, including social distancing mandates, shelter-in-place orders, vaccine mandates, and business restrictions and shutdowns, and consumer responses have had and could continue to have a negative impact on financial markets, economic conditions, and portions of our business. Although certain portions of our business have benefited, the impact of, and associated government, business, and consumer responses to, COVID-19 could negatively impact our business and results of operations in a number of ways, which may be difficult to accurately estimate or forecast, including, but not limited to, the following:

•a shutdown of one or more of our manufacturing facilities due to illness could significantly disrupt our production capabilities;

•a significant portion of our workforce could become unable to work, including as a result of illness or government restrictions;

•a decrease in demand for away-from-home establishments has adversely affected, and may continue to adversely affect, our foodservice operations;

•a change in demand resulting from restrictions on or changes in social interactions has affected, and could continue to affect, customers’ and consumers’ plans to purchase our products;

•a change in demand for or availability of our products as a result of retailers, distributors, or carriers modifying their restocking, fulfillment, or shipping practices;

•a shift in consumer spending as a result of the economic downturn could result in consumers moving to private label or lower margin products;

•a slowdown or stoppage in our supply chain or the failure of our suppliers, vendors, distributors, or third-party manufacturers to meet their obligations to us or experience disruptions in their ability to do so;

•a strain on our supply chain resulting from increased consumer demand at our retail customers, such as grocery stores, club stores, and value stores;

•a change in trade promotion and marketing activities, e.g., in response to changes in consumer viewing and shopping habits resulting from the cancellation of major events, travel restrictions, and in-store shopping practices, could adversely affect our current and future product sales;

•an impairment in the carrying amount of goodwill or intangible assets or a change in the useful life of definite-lived intangible assets has occurred and may again occur if there are sustained changes in government restrictions, consumer purchasing behaviors, or our financial results, particularly in our Canada Foodservice reporting unit, as there may be a heightened risk of impairment if there is a sustained decrease in demand in away-from-home establishments;

•a change in our five-year operating plan, which could cause a change in the allocation of investments among our reporting units, our growth expectations, and our fair value estimates, each of which could result in an impairment in the carrying amount of goodwill or intangible assets; and

•an increase in working capital needs and/or an increase in trade receivables write-offs as a result of increased financial pressures on our suppliers or customers.

Additionally, should any key employees become ill from COVID-19 and unable to work, the attention of the management team and resources could be diverted.

The potential effects of COVID-19 could also heighten the risks we face related to each of the risk factors disclosed below. As COVID-19 and its impacts are unprecedented and continuously evolving, the potential impacts to these risk factors remain uncertain. As a result, COVID-19 may also materially adversely affect our operating and financial results in a manner that is not currently known to us or that we do not currently consider to present material risks to our operations.

We operate in a highly competitive industry.

The food and beverage industry is highly competitive across all of our product offerings. Our principal competitors in these categories are manufacturers as well as retailers with their own branded and private label products. We compete based on product innovation, price, product quality, nutritional value, service, taste, convenience, brand recognition and loyalty, effectiveness of marketing and distribution, promotional activity, and the ability to identify and satisfy changing consumer preferences.

We may need to reduce our prices in response to competitive and customer pressures, including pressures ~~in relation~~related to private label products that are generally sold at lower prices. These pressures have restricted and may in the future continue to restrict our ability to increase prices in response to commodity and other cost ~~increases.~~increases, including those related to inflationary pressures. Failure to effectively assess, timely change, and properly set ~~proper~~ pricing, promotions, or trade incentives may negatively impact ~~the achievement of~~our ability to achieve our objectives.

The rapid emergence of new distribution channels, particularly e-commerce, may create consumer price deflation, affecting our retail customer relationships and presenting additional challenges to increasing prices in response to commodity or other cost ~~increases.~~increases, including those related to inflationary pressures. We may also need to increase or reallocate spending on marketing, retail trade incentives, materials, advertising, and new product, platform, or channel innovation to maintain or increase market share. These expenditures are subject to risks, including uncertainties about trade and consumer acceptance of our efforts. If we are unable to compete effectively, our profitability, financial condition, and operating results may decline.

Our success depends on our 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.

Consumer preferences for food and beverage products change continually and rapidly. Our success depends on our ability to predict, identify, and interpret the tastes and dietary habits of consumers and to offer products that appeal to consumer preferences, including with respect to health and wellness. Moreover, weak economic conditions, recessions, inflation, or other factors, such as global or local pandemics and severe or unusual weather events, could affect consumer preferences and demand. If we do not offer products that appeal to consumers, our sales and market share will decrease, which could materially and adversely affect our product sales, financial condition, and operating results.

We must distinguish between short-term trends and long-term changes in consumer preferences. If we do not accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could decline. In addition, because of our varied consumer base, we must offer an array of products that ~~satisfy~~satisfies a broad spectrum of consumer preferences. If we fail to expand our product offerings successfully across product categories or platforms, or if we do not rapidly develop products in faster-growing or more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and operating results.

Prolonged negative perceptions concerning the health implications of certain food and beverage products (including as they relate to obesity or other health concerns) could influence consumer preferences and acceptance of some of our products and marketing programs. We strive to respond to consumer preferences and social expectations, but we may not be successful in our efforts. Continued negative perceptions and failure to satisfy consumer preferences could materially and adversely affect our product sales, financial condition, and operating results.

In addition, achieving growth depends on our successful development, introduction, and marketing of innovative new products and line extensions. There are inherent risks associated with new product or packaging introductions, including uncertainties about trade and consumer acceptance or potential impacts on our existing product offerings. We may be required to increase expenditures for new product development. Successful innovation depends on our ability to correctly anticipate customer and consumer acceptance, to obtain, protect, and maintain necessary intellectual property rights, and to avoid infringing upon the intellectual property rights of others. We must also be able to respond successfully to technological advances by and intellectual property rights of our competitors, and failure to do so could compromise our competitive position and impact our product sales, financial condition, and operating results.

Changes in the retail landscape or the loss of key retail customers could adversely affect our financial performance.

Retail customers, such as supermarkets, warehouse clubs, and food distributors in our major markets, may continue to consolidate, resulting in fewer but larger customers for our business across various channels. ~~Consolidation also produces~~These larger ~~retail~~ customers ~~that~~ may seek to leverage their positions to improve their profitability by demanding improved efficiency, lower pricing, more favorable terms, increased promotional programs, or ~~specifically-tailored~~specifically tailored product offerings. In addition, larger retailers have scale to develop supply chains that permit them to operate with reduced inventories or to develop and market their own private label products. Retail consolidation and increasing retailer power could materially and adversely affect our product sales, financial condition, and operating results.

Retail consolidation also increases the risk that adverse changes in our customers’ business operations or financial performance may have a corresponding ~~material and~~ adverse effect on ~~us.~~us, which could be material. For example, if our customers cannot access sufficient funds or financing, then they may delay, decrease, or cancel purchases of our products, or delay or fail to pay us for previous purchases, which could materially and adversely affect our product sales, financial condition, and operating results.

In addition, technology-based systems, which give consumers the ability to shop through e-commerce websites and mobile commerce applications, are also significantly altering the retail landscape in many of our markets. If we are unable to adjust to developments in these changing landscapes, we may be disadvantaged in key channels and with certain consumers, which could materially and adversely affect our product sales, financial condition, and operating results.

Changes in our relationships with significant customers or suppliers, or in other business relationships, could adversely impact us.

We derive significant portions of our sales from certain significant customers (see Sales and Customers within Item 1, Business). ~~There can be no assurance that~~Some or all of our significant customers ~~will~~may not continue to purchase our products in the same mix or quantities or on the same terms as in the past, particularly as increasingly powerful retailers may demand lower pricing and focus on developing their own brands. The loss of a significant customer or a material reduction in sales or a change in the mix of products we sell to a significant customer could materially and adversely affect our product sales, financial condition, and operating results.

Disputes with significant suppliers, including disputes related to pricing or performance, could adversely affect our ability to supply products to our customers and could materially and adversely affect our product sales, financial condition, and operating results. In addition, terminations of relationships with other significant contractual counterparties, including licensors, could adversely affect our portfolio, product sales, financial condition, and operating results.

In addition, the financial condition of such customers, suppliers, and other significant contractual counterparties are affected in large part by conditions and events that are beyond our control. Significant deteriorations in the financial conditions of significant customers or suppliers, ~~and~~or in other business relationships, could materially and adversely affect our product sales, financial condition, and operating results.

Maintaining, extending, and expanding our reputation and brand image are essential to our business success.

We have many iconic brands with long-standing consumer recognition across the globe. Our success depends on our ability to maintain brand image for our existing products, extend our brands to new platforms, and expand our brand image with new product offerings.

We seek to maintain, extend, and expand our brand image through marketing investments, including advertising and consumer promotions, and product innovation. Negative perceptions ~~on the role~~ of food and beverage marketing could adversely affect our brand image or lead to stricter regulations and scrutiny of our marketing practices. Moreover, adverse publicity about legal or regulatory action against us, our quality and safety, our environmental or social impacts, our products becoming unavailable to consumers, or our suppliers and, in some cases, our competitors, could damage our reputation and brand image, undermine our customers’ or our consumers’ confidence, and reduce demand for our products, even if the regulatory or legal action is unfounded or not material to our operations. Furthermore, existing or increased legal or regulatory restrictions on our

advertising, consumer promotions, and marketing, or our response to those restrictions, could limit our efforts to maintain, extend, and expand our brands.

In addition, our success in maintaining, extending, and expanding our brand image depends on our ability to adapt to a rapidly changing media environment. We increasingly rely on social media and online dissemination of advertising campaigns. The growing use of social and digital media increases the speed and extent that information, including misinformation, and opinions can be shared. Negative posts or comments about us, our brands or our products, or our suppliers and, in some cases, our competitors, on social or digital media, whether or not valid, could seriously damage our brands and reputation. In addition, we might fail to appropriately target our marketing efforts, anticipate consumer preferences, or invest sufficiently in maintaining, extending, and expanding our brand image. If we do not maintain, extend, and expand our reputation or brand image, then our product sales, financial condition, and operating results could be materially and adversely affected.

We must leverage our brand value to compete against private label products.

In nearly all of our product categories, we compete with branded products as well as private label products, which are typically sold at lower prices. Our products must provide higher value and/or quality to our consumers than alternatives, particularly during periods of economic ~~uncertainty.~~uncertainty or inflation. Consumers may not buy our products if relative differences in value and/or quality between our products and private label products change in favor of competitors’ products or if consumers perceive ~~this type of~~such a change. If consumers prefer private label products, then we could lose market share or sales volumes, or ~~shift~~ our product mix could shift to lower margin offerings. A change in consumer preferences could also cause us to increase capital, marketing, and other expenditures, which could materially and adversely affect our product sales, financial condition, and operating results.

We may be unable to drive revenue growth in our key product categories or platforms, increase our market share, or add products that are in faster-growing and more profitable categories.

Our future results will depend on our ability to drive revenue growth in our key product categories ~~and~~or platforms as well as growth in the food and beverage industry in the countries in which we operate. Our future results will also depend on our ability to enhance our portfolio by adding innovative new products in faster-growing and more profitable categories or platforms and our ability to increase market share in our existing product ~~categories.~~categories or platforms. Our failure to drive revenue growth, limit market share decreases in our key product categories or platforms, or develop innovative products for new and existing categories or platforms could materially and adversely affect our product sales, financial condition, and operating results.

Product recalls or other product liability claims could materially and adversely affect us.

Selling products for human consumption involves inherent legal and other risks, including product contamination, spoilage, product tampering, allergens, or other adulteration. We have decided and could in the future decide to, and have been or could in the future be required to, recall products due to suspected or confirmed product contamination, adulteration, product mislabeling or misbranding, tampering, undeclared allergens, or other deficiencies. Product recalls or market withdrawals could result in significant losses due to their costs, the destruction of product inventory, and lost sales due to the unavailability of the product for a period of time.

We could also be adversely affected if consumers lose confidence in the safety and quality of certain of our food products or ingredients, or the food safety system generally. Adverse attention about these types of concerns, whether or not valid, may damage our reputation, discourage consumers from buying our products, or cause production and delivery disruptions that could negatively impact our net sales and financial condition.

We may also suffer losses if our products or operations violate applicable laws or regulations, or if our products cause injury, illness, or death. In addition, our marketing could face claims of false or deceptive advertising or other criticism. A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability. Moreover, even if a product liability or fraud claim is unsuccessful, has no merit, or is not pursued to conclusion, the negative publicity surrounding assertions against our products or processes could materially and adversely affect our product sales, financial condition, and operating results.

~~Unanticipated~~Climate change and legal or regulatory responses may have a long-term adverse impact on our business ~~disruptions~~and results of operations.

Global average temperatures are gradually increasing due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere, which may contribute to significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of natural resources and commodities, including dairy products, meat products, coffee beans, soybean and vegetable oils, sugar and other sweeteners, tomatoes, potatoes, corn products, wheat products, nuts, cocoa products, cucumbers, onions, other fruits and vegetables, spices, and flour used to

manufacture our products, and could ~~adversely~~further decrease food security for communities around the world. Climate change could also affect our ability to ~~provide our products to our customers.~~

~~We have a complex network of suppliers, owned~~procure necessary commodities at costs and ~~leased manufacturing locations, co-manufacturing locations, distribution networks,~~in quantities we currently experience and information systems that support our ability to consistently provide our products to our customers. Factors that are hard to predict or beyond our control, such as weather, raw material shortages, natural disasters, fires or explosions, political unrest, terrorism, generalized labor unrest, or health pandemics, could damage or disrupt our operations or our suppliers’, co-manufacturers’ or distributors’ operations. These disruptions may require us to make additional resources to restore our supply chain or distribution network. If we cannot respond to disruptions in our operations, whether by finding alternative suppliers or replacing capacity at key manufacturing or distribution locations, or if we are unable to quickly repair damage to our information, production, or supply systems, we may be late in delivering, or be unable to deliver, products to our customers andunplanned capital expenditures. Increasing concern over climate change may also ~~be unable to track orders, inventory, receivables, and payables. If that occurs, our customers’ confidence in us and long-term~~adversely impact demand for our products, or increase operating costs, due to changes in consumer preferences that cause consumers to switch away from products or ingredients considered to have a high climate change impact.

Additionally, there is an increased focus by foreign, federal, state, and local regulatory and legislative bodies regarding environmental policies relating to climate change, regulating greenhouse gas emissions, energy policies, and sustainability. Increased energy or compliance costs and expenses due to the impacts of climate change and additional legal or regulatory requirements regarding climate change or designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment could ~~decline. Any~~be costly and may cause disruptions in, or an increase in the costs associated with, the running of ~~these events~~our manufacturing and processing facilities and our business, as well as increase distribution and supply chain costs. Moreover, compliance with any such legal or regulatory requirements may require us to make significant changes to our business operations and strategy, which will likely incur substantial time, attention, and costs. Even if we make changes to align ourselves with such legal or regulatory requirements, we may still be subject to significant penalties if such laws and regulations are interpreted and applied in a manner inconsistent with our practices. The effects of climate change and legal or regulatory initiatives to address climate change could ~~materially~~have a long-term adverse impact on our business and ~~adversely~~results of operations.

Finally, we might fail to effectively address increased attention from the media, stockholders, activists, and other stakeholders on climate change and related environmental sustainability matters. Such failure, or the perception that we have failed to act responsibly with respect to such matters or to effectively respond to new or additional regulatory requirements regarding climate change, whether or not valid, could result in adverse publicity and negatively affect our ~~product sales, financial condition,~~business and ~~operating results.~~reputation. Moreover, from time to time we establish and publicly announce goals and commitments, including to reduce our impact on the environment. Our ability to achieve any stated goal, target, or objective is subject to numerous factors and conditions, many of which are outside of our control. Examples of such factors include evolving regulatory requirements affecting sustainability standards or disclosures or imposing different requirements, the pace of changes in technology, the availability of requisite financing, and the availability of suppliers that can meet our sustainability and other standards. If we fail to achieve, or are perceived to have failed or been delayed in achieving, or improperly report on our progress toward achieving these goals and commitments, it could negatively affect consumer preference for our products or investor confidence in our stock, as well as expose us to government enforcement actions and private litigation.

Business Risks

We may not successfully identify, complete, or realize the benefits from strategic acquisitions, alliances, divestitures, joint ventures, or other investments.

From time to time, we have evaluated and may continue to evaluate acquisition candidates, alliances, joint ventures, or other investments that may strategically fit our business objectives, and, as a result of some of these evaluations, we have acquired businesses or assets that we deem to be a strategic fit. We have also divested and may consider divesting businesses that do not meet our strategic objectives or growth or profitability targets. These activities may present financial, managerial, and operational risks including, but not limited to, diversion of management’s attention from existing core businesses, difficulties integrating or separating personnel and financial and other systems, inability to effectively and immediately implement control environment processes across a diverse employee population, adverse effects on existing or acquired customer and supplier business relationships, and potential disputes with buyers, sellers, or partners. Activities in such areas are regulated by numerous antitrust and competition laws in the United States, Canada, the European Union, the United Kingdom, and other ~~jurisdictions,~~jurisdictions. We have in the past and we may in the future be required to obtain ~~the~~ approval of these transactions by competition authorities ~~as well as~~or to satisfy other legal ~~requirements.~~requirements, and we may be unable to obtain such approvals or satisfy such requirements, each of which may result in additional costs, time delays, or our inability to complete such transactions.

To the extent we undertake acquisitions, alliances, joint ventures, investments, or other developments outside our ~~core~~established regions or in new categories, we may face additional risks related to such developments. For example, risks related to foreign operations include compliance with U.S. laws affecting operations outside of the United States, such as the FCPA, foreign currency exchange rate fluctuations, compliance with foreign regulations and laws, including tax laws, and exposure to politically and economically volatile developing markets. Any of these factors could materially and adversely affect our product sales, financial condition, and operating results.

To the extent we undertake divestitures, we may face additional risks related to such activities. For example, risks related to our ability to find appropriate buyers, execute transactions on favorable terms, separate divested business operations with minimal impact to our remaining operations, and effectively manage any transitional service arrangements. Further, our divestiture activities have in the past required, and may in the future require, us to recognize impairment charges. Any of these factors could materially and adversely affect our financial condition and operating results.

We may not be able to successfully execute our strategic initiatives.

We plan to continue to conduct strategic initiatives in various markets. Consumer demands, behaviors, tastes, and purchasing trends may differ in these markets and, as a result, our sales strategies may not be successful and our product sales may not meet expectations, or the margins on those sales may be less than currently anticipated. We may also face difficulties integrating new business operations with our current sourcing, distribution, information technology systems, and other operations. Additionally, we may not successfully complete any planned strategic initiatives, including achieving any previously announced productivity efficiencies and financial targets, any new business may not be profitable or meet our expectations, or any divestiture may not be completed without disruption. Any of these challenges could hinder our success in new markets or new distribution channels, which could adversely affect our results of operations and financial condition.

Our international operations subject us to additional risks and costs and may cause our profitability to decline.

We are a global company with sales and operations in numerous countries within developed and emerging markets. Approximately 29% of our 2021 net sales were generated outside of the United States. As a result, we are subject to risks inherent in global operations. These risks, which can vary substantially by market, are described in many of the risk factors discussed in this section and also include:

•compliance with U.S. laws affecting operations outside of the United States, including anti-bribery laws such as the FCPA;

•changes in the mix of earnings in countries with differing statutory tax rates, the valuation of deferred tax assets and liabilities, tax laws or their interpretations, or tax audit implications;

•the imposition of increased or new tariffs, quotas, trade barriers, or similar restrictions on our sales or imports, trade agreements, regulations, taxes, or policies that might negatively affect our sales or costs;

•foreign currency devaluations or fluctuations in foreign currency values, including risks arising from the significant and rapid fluctuations in foreign currency exchange markets and the decisions made and positions taken to hedge such volatility;

•compliance with antitrust and competition laws, data privacy laws, and a variety of other local, national, and multi-national regulations and laws in multiple jurisdictions;

•discriminatory or conflicting fiscal policies in or across foreign jurisdictions;

•changes in capital controls, including foreign currency exchange controls, governmental foreign currency policies, or other limits on our ability to import raw materials or finished product into various countries or repatriate cash from outside the United States;

•challenges associated with cross-border product distribution;

•changes in local regulations and laws, the uncertainty of enforcement of remedies in foreign jurisdictions, and foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources;

•risks and costs associated with political and economic instability, corruption, anti-American sentiment, and social and ethnic unrest in the countries in which we operate;

•the risks of operating in developing or emerging markets in which there are significant uncertainties regarding the interpretation, application, and enforceability of laws and regulations and the enforceability of contract rights and intellectual property rights;

•changing labor conditions and difficulties in staffing our operations;

•greater risk of uncollectible accounts or trade receivables and longer collection cycles; and

•design, implementation, and use of effective control environment processes across our various operations and employee base.

Slow economic growth or high unemployment in the markets in which we operate could constrain consumer spending, and declining consumer purchasing power could adversely impact our profitability. All of these factors could result in increased costs or decreased sales, and could materially and adversely affect our product sales, financial condition, and results of operations.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands.

We consider our intellectual property rights, particularly and most notably our trademarks, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be a significant and valuable aspect of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright, trade secret, and trade dress laws, as well as licensing agreements, third-party nondisclosure and assignment agreements, and policing of third-party misuses of our intellectual property. Our failure to develop or adequately protect our trademarks, products, new features of our products, or our technology, or any change in law or other changes that serve to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness and could materially harm our business and financial condition. We also license certain intellectual property, most notably trademarks, from third parties. To the extent that we are not able to contract with these third parties on favorable terms or maintain our relationships with these third parties, our rights to use certain intellectual property could be impacted.

We may be unaware of intellectual property rights of others that may cover some of our technology, brands, or products. Any litigation regarding patents or other intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations. Third-party claims of intellectual property infringement might also require us to enter into costly license agreements. We also may be subject to significant damages or injunctions against development and sale of certain products.

The Sponsors have substantial control over us and may have conflicts of interest with us in the future.

As of December 25, 2021, the Sponsors own approximately 42% of our common stock. Two of 11 members of our Board are partners and/or board members of 3G Capital and two members of our Board are officers and/or directors of Berkshire Hathaway and/or its affiliates. In addition, Paulo Basilio, our Global Chief Financial Officer, is a partner of 3G Capital. As a result, the Sponsors have the potential to exercise influence over management and have substantial control over Board decisions, including those affecting our capital structure, such as the issuance of additional capital stock, the incurrence of additional indebtedness, the implementation of stock repurchase programs, and the declaration and amount of dividends. The Sponsors also have substantial control over any action requiring the approval of the holders of our common stock, including adopting any amendments to our charter, electing directors, and approving mergers or sales of substantially all of our capital stock or our assets. In addition, to the extent that the Sponsors were to collectively hold a majority of our common stock, they together would have the power to take stockholder action by written consent to adopt amendments to our charter or take other actions, such as corporate transactions, that require the vote of holders of a majority of our outstanding common stock. Furthermore, the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. The Sponsors may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as the Sponsors continue to own a significant amount of our equity, they will continue to be able to strongly influence or effectively control our decisions.

We may be unable to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve our competitiveness.

We have implemented a number of ~~cost savings~~ initiatives, including ~~our Integration Program (as defined in~~ ~~Overview, in Item 7,~~ ~~Management’s Discussion~~development of an operations center and ~~Analysis of Financial Condition and Results of Operations~~),strategic long-term collaboration with suppliers, that we believe are important to position our business for future success and growth. We have evaluated and continue to evaluate changes to our organizational structure and operations to enable us to reduce costs, simplify or improve processes, and improve our competitiveness. Our future success may depend upon our ability to realize the benefits of these or other cost savings initiatives. In addition, certain of our initiatives may lead to increased costs in other aspects of our business such as increased conversion, outsourcing, or distribution costs. We must accurately predict costs and be efficient in executing any plans to achieve cost savings and operate efficiently in the highly competitive food and beverage industry, particularly in an environment of increased competitive activity. To capitalize on our efforts, we must carefully evaluate investments in our business and execute in those areas with the most potential return on investment. If we are unable to realize the anticipated benefits from any cost-saving efforts, we could be cost disadvantaged in the marketplace, and our competitiveness, production, profitability, financial ~~conditions,~~condition, and operating results could be adversely affected.

~~We may not be able to successfully execute our strategic initiatives.~~

We plan to continue to conduct strategic initiatives in various markets. Consumer demands, behaviors, tastes and purchasing trends may differ in these markets and, as a result, our sales may not be successful or meet expectations, or the margins on those sales may be less than currently anticipated. We may also face difficulties integrating new business operations with our current sourcing, distribution, information technology systems, and other operations. Any of these challenges could hinder our success in new markets or new distribution channels. We may also face difficulties divesting business operations with minimal impact to the retained businesses. There can be no assurance that we will successfully complete any planned strategic initiatives, that any new business will be profitable or meet our expectations, or that any divestiture will be completed without disruption, which could adversely affect our results of operations and financial condition.

~~Our international operations subject us to additional risks and costs and may cause our profitability to decline.~~

We are a global company with sales and operations in numerous countries within developed and emerging markets. Approximately 31% of our 2018 net sales were generated outside of the United States. As a result, we are subject to risks inherent in global operations. These risks, which can vary substantially by market, are described in many of the risk factors discussed in this section and also include:

~~compliance with U.S. laws affecting operations outside of the United States, including anti-bribery laws such as the FCPA;~~

changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or their interpretations, or tax audit implications;

the imposition of increased or new tariffs, quotas, trade barriers, or similar restrictions on our sales or imports, trade agreements, regulations, taxes, or policies that might negatively affect our sales or costs;

~~currency devaluations or fluctuations in currency values;~~

~~compliance with antitrust and competition laws, data privacy laws, and a variety of other local, national, and multi-national regulations and laws in multiple jurisdictions;~~

~~discriminatory or conflicting fiscal policies in or across foreign jurisdictions;~~

changes in capital controls, including currency exchange controls, government currency policies, or other limits on our ability to import raw materials or finished product into various countries or repatriate cash from outside the United States;

~~challenges associated with cross-border product distribution;~~

changes in local regulations and laws, the uncertainty of enforcement of remedies in foreign jurisdictions, and foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources;

~~risks and costs associated with political and economic instability, corruption, anti-American sentiment, and social and ethnic unrest in the countries in which we operate;~~

the risks of operating in developing or emerging markets in which there are significant uncertainties regarding the interpretation, application, and enforceability of laws and regulations and the enforceability of contract rights and intellectual property rights;

~~risks arising from the significant and rapid fluctuations in currency exchange markets and the decisions made and positions taken to hedge such volatility;~~

~~changing labor conditions and difficulties in staffing our operations;~~

~~greater risk of uncollectible accounts and longer collection cycles; and~~

~~design, implementation, and use of effective control environment processes across our diverse operations and employee base.~~

In addition, political and economic changes or volatility, geopolitical conflicts, terrorist activity, political unrest, civil strife, acts of war, public corruption, expropriation, and other economic or political uncertainties could interrupt and negatively affect our business operations or customer demand. Slow economic growth or high unemployment in the markets in which we operate could constrain consumer spending, and declining consumer purchasing power could adversely impact our profitability. All of these factors could result in increased costs or decreased sales, and could materially and adversely affect our product sales, financial condition, and results of operations.

~~Our performance may be adversely affected by economic and political conditions in the United States and in various other nations where we do business.~~

Our performance has been in the past and may continue in the future to be impacted by economic and political conditions in the United States and in other nations where we do business. Economic and financial uncertainties in our international markets, including uncertainties surrounding the legal and regulatory effects of Brexit, changes to major international trade arrangements (e.g., the United States-Mexico-Canada Agreement), and the imposition of tariffs by certain foreign governments, including China and Canada, in response to the imposition of tariffs or modification of trade relationships by the United States, could negatively impact our operations and sales. Other factors impacting our operations in the United States and in international locations where we do business include export and import restrictions, currency exchange rates, currency devaluation, cash repatriation restrictions, recessionary conditions, foreign ownership restrictions, nationalization, the impact of hyperinflationary environments, terrorist acts, and political unrest. Such factors in either domestic or foreign jurisdictions, and our responses to them, could materially and adversely affect our product sales, financial condition, and operating results. For further information on Venezuela, see Note 16, ~~Venezuela - Foreign Currency and Inflation,~~ ~~in Item 8,~~ ~~Financial Statements and Supplementary Data~~.

~~We rely on our management team and other key personnel and may be unable to hire or retain key personnel or a highly skilled and diverse global workforce.~~

We depend on the skills, working relationships, and continued services of key personnel, including our experienced management team. In addition, our ability to achieve our operating goals depends on our ability to identify, hire, train, and retain qualified individuals. We compete with other companies both within and outside of our industry for talented personnel, and we may lose key personnel or fail to attract, train, and retain other talented personnel and a diverse global workforce with the skills and in the locations we need to operate and grow our business. Unplanned turnover, failure to attract and develop personnel with key emerging capabilities such as e-commerce and digital marketing skills, or failure to develop adequate succession plans for leadership positions, including the Chief Executive Officer position, could deplete our institutional knowledge base and erode our competitiveness. Changes in immigration laws and policies could also make it more difficult for us to recruit or relocate skilled employees. Any such loss, failure, or limitation could adversely affect our product sales, financial condition, and operating results.

~~We are significantly dependent on information technology, and we may be unable to protect our information systems against service interruption, misappropriation of data, or breaches of security.~~

We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial information, to manage a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements. We also depend on our information technology infrastructure for digital marketing activities and for electronic communications among our locations, personnel, customers, and suppliers. These information technology systems, some of which are managed by third parties, may be susceptible to damage, invasions, disruptions, or shutdowns due to hardware failures, computer viruses, hacker attacks and other cybersecurity risks, telecommunication failures, user errors, catastrophic events or other factors. If our information technology systems suffer severe damage, disruption, or shutdown, by unintentional or malicious actions of employees and contractors or by cyber-attacks, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, reputational damage, transaction errors, processing inefficiencies, the leakage of confidential information, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed.

In addition, if we are unable to prevent security breaches or disclosure of non-public information, we may suffer financial and reputational damage, litigation or remediation costs, fines, or penalties because of the unauthorized disclosure of confidential information belonging to us or to our partners, customers, consumers, or suppliers.

Misuse, leakage, or falsification of information could result in violations of data privacy laws and regulations, damage to our reputation and credibility, loss of opportunities to acquire or divest of businesses or brands, and loss of ability to commercialize products developed through research and development efforts and, therefore, could have a negative impact on net sales. In addition, we may suffer financial and reputational damage because of lost or misappropriated confidential information belonging to us, our current or former employees, or to our suppliers or consumers, and may become subject to legal action and increased regulatory oversight. We could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and information systems.

~~Our results of operations could be affected by natural events in the locations in which we or our customers, suppliers, distributors, or regulators operate.~~

We have been and may in the future be impacted by severe weather and other geological events, including hurricanes, earthquakes, floods, or tsunamis that could disrupt our operations or the operations of our customers, suppliers, distributors, or regulators. Natural disasters or other disruptions at any of our facilities or our suppliers’ or distributors’ facilities may impair or delay the delivery of our products. Influenza or other pandemics could disrupt production of our products, reduce demand for certain of our products, or disrupt the marketplace in the foodservice or retail environment with consequent material adverse effects on our results of operations. While we insure against many of these events and certain business interruption risks and have policies and procedures to manage business continuity planning, we cannot provide any assurance that such insurance will compensate us for any losses incurred as a result of natural or other disasters or that our business continuity plans will effectively resolve the issues in a timely manner. To the extent we are unable to, or cannot, financially mitigate the likelihood or potential impact of such events, or effectively manage such events if they occur, particularly when a product is sourced from a single location, there could be a material adverse effect on our business and results of operations, and additional resources could be required to restore our supply chain.

~~The Sponsors have substantial control over us and may have conflicts of interest with us in the future.~~

As of December 29, 2018, the Sponsors own approximately 49% of our common stock. Four of our current 11 directors had been directors of Heinz prior to the closing of the 2015 Merger and remained directors of Kraft Heinz pursuant to the merger agreement. In addition, the Board elected Joao M. Castro-Neves, a partner of 3G Capital, one of the Sponsors, effective June 12, 2019. Furthermore, some of our executive officers, including Bernardo Hees, our Chief Executive Officer, are partners of 3G Capital. As a result, the Sponsors have the potential to exercise influence over management and have substantial control over decisions of our Board of Directors as well as over any action requiring the approval of the holders of our common stock, including adopting any amendments to our charter, electing directors, and approving mergers or sales of substantially all of our capital stock or our assets. In addition, to the extent that the Sponsors were to collectively hold a majority of our common stock, they together would have the power to take shareholder action by written consent to adopt amendments to our charter or take other actions, such as corporate transactions, that require the vote of holders of a majority of our outstanding common stock. The directors designated by the Sponsors may have significant authority to effect decisions affecting our capital structure, including the issuance of additional capital stock, the incurrence of additional indebtedness, the implementation of stock repurchase programs, and the decision of whether to declare dividends and the amount of any such dividends. Additionally, the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. The Sponsors may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as the Sponsors continue to own a significant amount of our equity, they will continue to be able to strongly influence or effectively control our decisions.

Financial Risks

Our level of indebtedness, as well as our ~~failure~~ability to comply with covenants under our debt instruments, could adversely affect our business and financial condition.

We have a substantial amount of indebtedness and are permitted to incur a substantial amount of additional indebtedness, including secured debt. Our existing debt, together with any incurrence of additional indebtedness, could have important consequences, including, but not limited to:

•increasing our vulnerability to general adverse economic and industry conditions;

•limiting our ability to obtain additional financing for working capital, capital expenditures, research and development, debt service requirements, acquisitions, and general corporate or other purposes;

•resulting in a downgrade to our credit rating, which could adversely affect our cost of funds, including our commercial paper ~~programs; liquidity;~~programs, liquidity, and access to capital markets;

•restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

•limiting our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors who are not as highly leveraged;

•making it more difficult for us to make payments on our existing indebtedness;

•requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, payments of dividends, capital expenditures, and future business opportunities;

•exposing us to risks related to fluctuations in foreign currency, as we earn profits in a variety of foreign currencies ~~around~~and the ~~world and substantially all~~majority of our debt is denominated in U.S. dollars; and

•in the case of any additional indebtedness, exacerbating the risks associated with our substantial financial leverage.

In addition, ~~there can be no assurance that~~ we ~~will~~may not generate sufficient cash flow from operations or ~~that~~ future debt or equity financings ~~will~~may not be available to us to enable us to pay our indebtedness or to fund other needs. As a result, we may need to refinance all or a portion of our indebtedness on or before maturity. ~~There is no assurance that we will~~We may not be able to refinance any of our indebtedness on favorable terms, or at all. Any inability to generate sufficient cash flow or to refinance our indebtedness on favorable terms could have a material adverse effect on our financial condition.

Our indebtedness instruments contain customary representations, warranties, and covenants, including a financial covenant in our senior unsecured revolving credit facility (the “Senior Credit Facility”) to maintain a minimum shareholders’ equity (excluding accumulated other comprehensive income/(losses)). The creditors who hold our debt could accelerate amounts due in the event that we default, which could potentially trigger a default or acceleration of the maturity of our other debt. If our operating performance declines, or if we are unable to comply with any covenant, such as our ability to timely prepare and file our periodic reports with the SEC, we have in the past needed and may in the future need to obtain waivers from the required creditors under our indebtedness instruments to avoid being in default.

During the period from December 29, 2018 to the filing date of this Annual Report on Form 10-K, due to the delays in the preparation of our financial statements for the fiscal year ended December 29, 2018 and the fiscal quarter ended March 30, 2019, we were not in compliance with certain reporting covenants under the Senior Credit Facility. As previously disclosed, we entered into two waiver agreements with respect to the Senior Credit Facility, pursuant to which the lenders, as party to the Senior Credit Facility, and JPMorgan Chase Bank, N.A., as administrative agent, granted temporary waivers of compliance by us with respect to the requirement to furnish the lenders a copy of the consolidated financial statements for our fiscal year ended December 29, 2018 no later than June 28, 2019 and for our fiscal quarter ended March 30, 2019 no later than July 31, 2019. The filing of this Annual Report on Form 10-K will constitute compliance with the requirement to furnish the lenders a copy of the consolidated financial statements for our fiscal year ended December 29, 2018 no later than June 28, 2019. We also currently expect to file our Quarterly Report on Form 10-Q for the quarter ended March 30, 2019 on or before July 31, 2019 in compliance with the requirement to furnish the lenders a copy of the consolidated financial statements for such quarter no later than July 31, 2019. For further information related to the two waiver agreements, see ~~Liquidity and Capital Resources~~ ~~in Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~.

~~However, we may not be able to secure similar waivers for any future delays in our periodic reports with the SEC. Furthermore, if~~If we breach any covenants under our indebtedness instruments and seek a waiver, we may not be able to obtain a waiver from the required creditors, or we may not be able to remedy compliance within the terms of any waivers approved by the required creditors. If this occurs, we would be in default under our indebtedness instruments and unable to access our Senior Credit Facility. In addition, certain creditors could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

Additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets could negatively affect our financial condition and results of operations.

~~Our goodwill balance consists~~As of 20December 25, 2021, we maintain 14 reporting units, ~~and~~nine of which comprise our goodwill balance. Our indefinite-lived intangible asset balance primarily consists of a number of individual ~~brands.~~ brands. We test our reporting units and brands for impairment annually as of the first day of our second quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections, ~~(for example due to regulatory or industry changes),~~ disposals of significant brands or components of our business, unexpected business disruptions (for example due to a natural disaster, pandemic, or loss of a customer, supplier, or other significant business relationship), unexpected significant declines in operating results, or significant adverse changes in the markets in which we ~~operate.~~operate, changes in income tax rates, changes in interest rates, or changes in management strategy. We test reporting units for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. We test brands for impairment by comparing the estimated fair value of each brand with its carrying amount. If the carrying amount of a reporting unit or brand exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount, in the case of reporting units, not to exceed to the associated carrying amount of goodwill.

~~As detailed in Note 10,~~ ~~Goodwill and Intangible Assets, in Item 8,~~ ~~Financial Statements and Supplementary Data~~, as a result of our 2018 annual impairment test in the second quarter of 2018, we recognized a goodwill impairment loss of $133 million and an indefinite-lived intangible asset impairment loss of $101 million. Additionally, as part of our interim impairment test in the third quarter of 2018, we recognized an indefinite-lived intangible asset impairment loss of $215 million and a definite-lived intangible asset impairment loss of $3 million.

For the fourth quarter of 2018, in connection with the preparation of our year-end financial statements, we assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any reporting units or brands were below their carrying amounts. Although our annual impairment test is performed during the second quarter, we perform this qualitative assessment each interim reporting period.

While there was no single determinative event or factor, the consideration in totality of several factors that developed during the fourth quarter of 2018 led us to conclude that it was more likely than not that the fair values of certain reporting units and brands were below their carrying amounts. These factors included: (i) a sustained decrease in our share price in November and December of 2018, which reduced our market capitalization below the book value of net assets; (ii) the completion of our fourth quarter results, which were below management’s expectations due to several factors such as higher than expected supply chain costs and increased competition; (iii) the development and approval of our 2019 annual operating plan in December 2018, which provided additional insights into expectations and priorities for the coming years, such as lower growth and margin expectations; (iv) the announcement in November 2018 to sell certain assets in our natural cheese portfolio in Canada, which changed the composition and use of the remaining assets and brands in the associated reporting unit; (v) fluctuations in foreign exchange rates in certain countries; (vi) increased interest rates in certain locations, including an increase in the United States in December 2018; and (vii) increased and prolonged economic and regulatory uncertainty in the United States and global economies as of the end of December 2018.

Accordingly, we performed an interim impairment test on these reporting units and brands as of December 29, 2018. As a result of our interim impairment test, we recognized goodwill impairment losses of $6.9 billion and indefinite-lived intangible asset impairment losses of $8.6 billion in the fourth quarter of 2018.

affected by COVID-19, change, or if management’s expectations or plans otherwise change, including ~~as a result of the development of~~updates to our ~~global five-year~~long-term operating ~~plan,~~plans, then one or more of our reporting units or brands might become impaired in the ~~future.~~ future, which could negatively affect our operating results or net worth. Additionally, any decisions to divest certain non-strategic assets has led and could in the future lead to goodwill or intangible asset impairments.

Further, certain organizational changes have previously impacted, and could in the future impact, our internal reporting and reportable segments. These changes may also affect our reporting unit structure and require an interim impairment test (or transition test). We expect the organizational changes we announced in the fourth quarter of 2021 to impact our future internal reporting, reportable segments, and reporting unit structure and to require an interim impairment test in the second quarter of 2022, once the changes are effective. Additionally, any future plans to change reporting units, including as a result of integrating a new acquisition into an existing reporting unit that has a fair value below carrying amount of goodwill, has led, and could in the future lead, to an impairment of goodwill.

As ~~detailed in Note 10,~~ ~~Goodwill~~a result of our annual and ~~Intangible Assets, in Item 8,~~ ~~Financial Statements~~interim impairment tests and ~~Supplementary Data~~,impairment tests related to assets held for sale, we ~~recorded~~recognized goodwill impairment losses ~~totaling $15.9~~of $318 million and indefinite-lived intangible asset impairment losses of $1.3 billion ~~for the year ended December 29, 2018.~~in 2021, goodwill impairment losses of $2.3 billion and indefinite-lived intangible asset impairment losses of $1.1 billion in 2020, and goodwill impairment losses of $1.2 billion and indefinite-lived intangible asset impairment losses of $702 million in 2019. Our reporting units and brands that were impaired ~~in 2018~~ were written down to their respective fair values resulting in zero excess fair value over carrying amount as of ~~their latest 2018~~the applicable impairment ~~testing~~test dates. Accordingly, these and other ~~individual~~ reporting units and brands that have 20% or less excess fair value over carrying amount as of ~~their~~the latest 2021 impairment testing date have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future. Reporting units with ~~a heightened risk of future impairments~~20% or less fair value over carrying amount had an aggregate goodwill carrying amount of ~~$29.0~~$28.3 billion ~~at December 29, 2018~~as of their latest 2021 impairment testing date and included: ~~U.S. Grocery, U.S. Refrigerated,~~Enhancers, Specialty, and Away from Home (ESA), Kids, Snacks, and Beverages (KSB), Meal Foundations and Coffee (MFC), Canada Retail, ~~Latin America Exports, Southeast Europe, Australia~~Canada Foodservice, and ~~New Zealand, and Northeast Asia. Of the $29.0 billion with a heightened risk of future impairments, $9.3 billion is attributable to reporting~~Puerto Rico. Reporting units with ~~0% excess~~between 20-50% fair value over carrying ~~amount.~~amount had an aggregate goodwill carrying amount of $2.2 billion as of their latest 2021 impairment testing date and included Northern Europe and Asia. The Continental Europe reporting unit had a fair value over carrying amount in excess of 50% and a goodwill carrying amount of $961 million as of its latest 2021 impairment testing date. Brands with ~~a heightened risk of future impairments~~20% or less fair value over carrying amount had an aggregate carrying amount after impairment of ~~$29.3~~$21.3 billion ~~at December 29, 2018~~as of their latest 2021 impairment testing date and included: Kraft, ~~Philadelphia~~, Oscar Mayer, Velveeta, Miracle Whip, ~~Planters~~Lunchables, Ore-Ida, Maxwell House, A1, Classico, Cool Whip, ~~Stove Top~~Jet Puffed, ~~ABC~~Plasmon, and ~~Quero. Of the $29.3 billion with a heightened risk~~Wattie’s. The aggregate carrying amount of ~~future impairments, $24.0 billion is attributable to~~ brands with ~~0% excess~~ fair value over carrying ~~amount.~~amount between 20-50% was $6.5 billion as of their latest 2021 impairment testing date. Although the remaining ~~reporting units and~~ brands, with a carrying value of $11.8 billion, have more than ~~20%~~50% excess fair value over carrying amount as of their latest ~~2018~~2021 impairment testing date, these amounts are also associated with the 2013 Heinz ~~acquisition~~Acquisition and the 2015 Merger and are recorded on ~~the~~our consolidated balance sheet at their estimated acquisition date fair values. Therefore, if any assumptions, estimates, or market factors change in the future, these amounts are also susceptible to ~~impairments, which could negatively affect our operating results or net worth.~~

impairments.

Our net sales and net income may be exposed to foreign exchange rate fluctuations.

We derive a substantial portion of our net sales from international operations. We hold assets, ~~and~~ incur liabilities, earn revenue, and pay expenses in a variety of currencies other than the U.S. dollar, primarily the Canadian dollar, British pound sterling, euro, Australian dollar, ~~Canadian dollar,~~Chinese renminbi, Indonesian rupiah, New Zealand dollar, Brazilian real, ~~Indonesian rupiah, Chinese renminbi,~~ and ~~Indian rupee.~~Russian ruble. Since our consolidated financial statements are reported in U.S. dollars, fluctuations in foreign currency exchange rates from period to period will have an impact on our reported results. We have implemented foreign currency hedges intended to reduce our exposure to changes in foreign currency exchange rates. However, these hedging strategies may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations. In addition, in certain circumstances, we may incur costs in one currency related to services or products for which we are paid in a different currency. As a result, factors associated with international operations, including changes in foreign currency exchange rates, could significantly affect our results of operations and financial condition.

Commodity, energy, and other input prices are volatile and could negatively affect our consolidated operating results.

We purchase and use large quantities of commodities, including dairy products, meat products, coffee beans, ~~nuts, tomatoes, potatoes,~~ soybean and vegetable oils, sugar and other sweeteners, tomatoes, potatoes, corn products, wheat products, nuts, cocoa products, cucumbers, onions, other fruits and vegetables, spices, and flour to manufacture our products. In addition, we purchase and use significant quantities of resins, fiberboard, metals, cardboard, glass, ~~plastic,~~ paper, ~~fiberboard,~~plastic, and other materials to package our products, and we use other inputs, such as electricity, natural gas, and water, to operate our facilities. We are also exposed to changes in oil prices, including diesel fuel, which influence both our packaging and transportation costs. Prices for commodities, energy, and other supplies are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, foreign currency fluctuations, severe weather, ornatural disasters, global climate change, water risk, health pandemics, crop failures, orcrop shortages due to plant disease or insect and other pest infestation, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, including increased demand for biofuels, and

agricultural programs. Additionally, we may be unable to maintain favorable arrangements with respect to the costs of procuring raw materials, packaging, services, and transporting products, which could result in increased expenses and negatively affect our operations. Furthermore, the cost of raw materials and finished products may fluctuate due to movements in cross-currency transaction rates. Rising commodity, energy, and other input costs could materially and adversely affect our cost of operations, including the manufacture, transportation, and distribution of our products, which could materially and adversely affect our financial condition and operating results.

Although we monitor our exposure to commodity and other input prices as an integral part of our overall risk management program, and seek to hedge against input price increases to the extent we deem appropriate, we do not fully hedge against changes in commodity prices, and our hedging strategies may not protect us from increases in specific raw materials costs. For example, hedging our costs for one of our key commodities, dairy products, is difficult because dairy futures markets are not as ~~developed~~liquid as many other commodities futures markets. Continued volatility or sustained increases in the prices of commodities and other supplies we purchase could increase the costs of our products, and our profitability could suffer. Moreover, increases in the prices of our products to cover these increased costs may result in lower sales volumes, or we may be constrained from increasing the prices of our products by competitive and consumer pressures. If we are not successful in our hedging activities, or if we are unable to price our products to cover increased costs, then commodity and other input price volatility or increases could materially and adversely affect our financial condition and operating results.

In 2021, we experienced higher than expected commodity costs and supply chain costs, including logistics, procurement, and manufacturing costs, largely due to inflationary pressures. We expect this cost inflation to remain elevated through at least 2022. Although we take measures to mitigate the impact of this inflation through pricing actions and efficiency gains, if these measures are not effective our financial condition, operating results, and cash flows could be materially adversely affected. Even if such measures are effective, we expect that there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred. Additionally, the pricing actions we take could result in a decrease in market share.

Volatility in the market value of all or a portion of the derivatives we use to manage exposures to fluctuations in commodity prices may cause volatility in our gross profit and net income.

We use commodity futures, options, and swaps to economically hedge the price of certain input costs, including ~~dairy~~vegetable oils, diesel fuel, corn products, packaging products, sugar, coffee beans, wheat products, meat products, ~~coffee beans, sugar, vegetable oils, wheat~~natural gas, dairy products, ~~corn products,~~and cocoa ~~products, packaging products, diesel fuel, and natural gas.~~products. We recognize gains and losses based on changes in the values of these commodity derivatives. We recognize these gains and losses in cost of products sold in our consolidated statements of income to the extent we utilize the underlying input in our manufacturing process. We recognize ~~these~~the unrealized gains and losses on these commodity derivatives in general corporate expenses ~~in our segment operating results~~ until ~~we sell the underlying products, at which time we reclassify~~realized; once realized, the gains and losses ~~to segment~~are recorded in the applicable segment’s operating results. Accordingly, changes in the values of our commodity derivatives may cause volatility in our gross profit and net income.

~~Our results could be adversely impacted as a result of increased pension, labor, and people-related expenses.~~

Inflationary pressures and any shortages in the labor market could increase labor costs, which could have a material adverse effect on our consolidated operating results or financial condition. Our labor costs include the cost of providing employee benefits in the United States, Canada, and other foreign jurisdictions, including pension, health and welfare, and severance benefits. Any declines in market returns could adversely impact the funding of pension plans, the assets of which are invested in a diversified portfolio of equity and fixed-income securities and other investments. Additionally, the annual costs of benefits vary with increased costs of health care and the outcome of collectively-bargained wage and benefit agreements.

Furthermore, we may be subject to increased costs or experience adverse effects to our operating results if we are unable to renew collectively bargained agreements on satisfactory terms. Our financial condition and ability to meet the needs of our customers could be materially and adversely affected if strikes or work stoppages and interruptions occur as a result of delayed negotiations with union-represented employees both in and outside of the United States.

Regulatory Risks

~~Compliance~~Our compliance with laws ~~regulations,~~ and ~~related interpretations~~regulations, and related legal claims or ~~other~~ regulatory enforcement actions, could ~~impact~~expose us to significant liabilities and damage our business, and we face additional risks and uncertainties related to any potential actions resulting from the SEC’s ongoing investigation, as well as potential additional subpoenas, litigation, and regulatory proceedings.reputation.

As a large, global food and beverage company, we operate in a ~~highly-regulated~~highly regulated environment with ~~constantly-evolving~~constantly evolving legal and regulatory frameworks. Various laws and regulations govern ~~production, storage, distribution, sales,~~our practices including, but not limited to, those related to advertising and marketing, product claims and labeling, ~~including on-pack claims, information or disclosures, marketing, licensing,~~the environment, intellectual property, consumer protection and product liability, commercial disputes, trade and export controls, anti-trust, data privacy, labor ~~tax, environmental matters, privacy, as well as~~and employment, workplace health and safety, and ~~data protection practices. Government authorities regularly change~~tax. As a consequence, we face a heightened risk of legal claims and regulatory enforcement actions in the ordinary course of business. In addition, the imposition of new laws, changes in laws or regulatory requirements or changing interpretations thereof, and differing or competing regulations and ~~their interpretations. In particular, Brexit~~standards across the markets where our products are made, manufactured, distributed, and sold have in the past and could continue to result in ~~a new regulatory regime in the United Kingdom that may or may not follow that of the European Union,~~higher compliance costs, capital expenditures, and the creation of new and divergent laws and regulations could increase the cost and complexity of our compliance. In addition, this shift in regime could create a number of legal and accounting complexities with respect to existing relationships, including uncertainty regarding the continuity of contracts entered into by entities in the United Kingdom or the European Union. Our compliance with new or revised laws and regulations, or the interpretation and application of existing laws and regulations, could materially andhigher production costs, adversely ~~affect~~impacting our product sales, financial condition, and results of operations. ~~As a consequence of~~Furthermore, actions we have taken or may take, or decisions we have made or may make, in response to the ~~legal and regulatory environment~~COVID-19 pandemic, may result in ~~which we operate, we are faced with a heightened risk of~~investigations, legal claims, ~~and regulatory enforcement actions.~~

As previously disclosed on February 21, 2019, we received a subpoena in October 2018 from the SEC related to our procurement area, specifically the accounting policies, procedures, and internal controls related to our procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to agreements with our suppliers. Following the receipt of this subpoena, we, together with external counsel and forensic accountants, and subsequently, under the oversight of the Audit Committee, conducted an internal investigation into our procurement area and related matters. Following our earnings release and investor call on February 21, 2019, when we announced the results of our interim assessment of goodwill and intangible asset impairments, the SEC requested additional information related to our financial reporting, internal controls, and disclosures, our assessment of goodwill and intangible asset impairments, and our communications with certain shareholders. It is our understanding that the United States Attorney’s Office for the Northern District of Illinois also is reviewing this matter, working with the SEC and receiving materials from it. After our earnings release, four securities class action lawsuits, one class action lawsuit under the Employee Retirement Income Security Act (“ERISA”), and five stockholder derivative actions were filedlitigation against us and certain of our current and former officers, directors, and employees. One of the securities class action lawsuits was voluntarily dismissed without prejudice, while the other matters are still pending.

We intend to vigorously defend against these lawsuits. We are unable, at this time, to estimate our potential liability in these matters, but we may be required to pay judgments, settlements, or other penalties and incur other costs and expenses in connection with the securities and ERISA class action lawsuits and the stockholder derivative actions. See Item 3, ~~Legal Proceedings, and Note 18,~~ ~~Commitment and Contingencies, in Item 8,~~ ~~Financial Statements and Supplementary Data, for additional information.~~

Furthermore, if the SEC commences legal action as a result of the investigation, we could be required to pay significant penalties and become subject to injunctions, cease and desist orders, and other equitable remedies. The SEC investigation will not be resolved as a result of the completion of the internal investigation and the filing of this Annual Report on Form 10-K. We can provide no assurances as to the outcome or timing of any governmental or regulatory investigation.

We have incurred, and may continue to incur, significant expenses related to legal, accounting, and other professional services in connection with the internal investigation, the SEC investigation, and related legal and regulatory matters. These expenses, the delay in timely filing this Annual Report on Form 10-K, the delay in timely filing our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2019, and the diversion of the attention of the management team that has occurred, and is expected to continue, has adversely affected, and could continue to adversely affect, our business, financial condition, and cash flows.us.

As a result of ~~matters associated with the internal investigation related to the SEC investigation and various lawsuits, we are exposed to greater risks associated with litigation,~~any such legal claims or regulatory ~~proceedings, and government~~ enforcement actions, we could be subject to monetary judgments, settlements, and ~~additional subpoenas. Any future investigations~~civil and criminal actions, including fines, injunctions, product recalls, penalties, disgorgement of profits, or ~~additional lawsuits may have a material adverse effect on~~activity restrictions, which could materially and adversely affect our ~~business,~~reputation, product sales, financial condition, results of operations, and cash flows. We evaluate these legal claims and regulatory enforcement actions to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and disclose relevant material litigation claims, legal proceedings, or regulatory enforcement actions as appropriate and in accordance with SEC rules and accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Our assessments and estimates are based on the information available to management at the time and involve a significant amount of judgment. Actual outcomes or losses may differ materially from our current assessments and estimates. In addition, even if a claim is unsuccessful, without merit, or not pursued to completion, the cost of defending against or responding to such a claim, including expenses and management time, could adversely affect our financial condition and operating results.

We previously identified material weaknesses in our internal control over financial ~~reporting. If we are unable to remediate these material weaknesses, or~~reporting, and if we ~~experience additional material weaknesses or other deficiencies in the future or otherwise~~ fail to maintain an effective system of internal controls, we may not be able to accurately and timely report our financial results, in which ~~case~~could negatively impact our business, ~~may be harmed, investors may lose~~investor confidence, ~~in the accuracy and completeness of our financial reports,~~ and the price of our common ~~stock may decline.~~stock.

~~Our management is responsible~~As previously disclosed in our Annual Report on Form 10-K for ~~establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on~~ the ~~effectiveness of our system of internal control. Our internal control over financial reporting is~~year ended December 28, 2019, we identified a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally acceptedmaterial weakness in the United States of America (“U.S. GAAP”). As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies. In particular, we are required to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires us to furnish annually a report by management on the effectiveness of our internal control over financial reporting. In addition, our independent registered public accounting firm is required to report on the effectiveness of our internal control over financial reporting.

~~In connection with our most recent year-end~~risk assessment component of internal control over financial reporting ~~we determined that,~~ as ~~of December 29, 2018,~~ we did not ~~maintain effective internal control over financial reporting because~~appropriately design controls in response to the risk of ~~a material weakness in our risk assessment process related to designing and maintaining controls sufficient to appropriately respond~~misstatement due to changes in our business environment. This material weakness resulted in misstatements that were corrected in the restatement included in our Annual Report on Form 10-K for the year ended December 29, 2018. This material weakness in risk assessment also contributed to a material ~~weaknesses~~weakness arising from ~~(i)~~ supplier contracts and related ~~arrangements,~~arrangements. We completed remediation measures related to the material weaknesses and ~~(ii) goodwill and indefinite-lived intangible asset impairment testing, and we have taken and are taking certain remedial steps to improve~~concluded that our internal control over financial ~~reporting. For further discussion~~reporting was effective as of ~~the material weaknesses identified and~~June 27, 2020. Completion of remediation does not provide assurance that our ~~remedial efforts, see Item 9A,~~ ~~Controls and Procedures~~.

~~Remediation efforts place a significant burden on management and add increased pressure~~remediation or other controls will continue to our financial resources and processes. As a result, we may not be successful in making the improvements necessary to remediate the material weaknesses identified by management, be able to do so in a timely manner,operate properly or ~~be able to identify and remediate additional control deficiencies, including material weaknesses, in the future.~~remain adequate.

If we are unable to ~~successfully remediate our existing or any future material weaknesses or other deficiencies in our~~maintain effective internal control over financial reporting ~~the accuracy~~or disclosure controls and ~~timing of~~procedures, our ability to record, process, and report financial ~~reporting may~~information accurately and to prepare financial statements within required time periods could be adversely ~~affected;~~affected, which could subject us to litigation, investigations, or penalties; negatively affect our liquidity, our access to capital markets, ~~the~~ perceptions of our creditworthiness, ~~and~~ our ability to complete acquisitions, ~~may be adversely affected; we may be unable~~our ability to maintain ~~or regain~~ compliance with ~~applicable securities laws, The Nasdaq Stock Market LLC (“Nasdaq”) listing requirements, and the~~ covenants under our debt instruments or derivative arrangements regarding the timely filing of periodic ~~reports; we may be subject to regulatory investigations and penalties; investors may lose~~reports, or investor confidence in our financial reporting; ~~we may suffer~~or cause defaults, accelerations, or cross-accelerations under our debt instruments or derivative arrangements to the extent we are unable to obtain waivers from the required creditors or counterparties or ~~are unable~~ to cure any ~~breaches; and~~breaches, any of which may require management resources or cause our stock price ~~may~~to decline.

A downgrade in our credit rating could adversely impact interest costs or access to future borrowings.

Our ~~failure to prepare~~borrowing costs can be affected by short and ~~timely file our periodic reports with the SEC limits~~long-term credit ratings assigned by rating organizations. A decrease in these credit ratings could limit our access to ~~the public~~capital markets to raise debt or equity capital, restricts our ability to issue equity securities, including within the Kraft Heinz Savings Plan and the Kraft Heinz Union Savings Plan (collectively, the “Plan”), and could impact our listing on Nasdaq.

We did not file our Annual Report on Form 10-K for the year ended December 29, 2018 or our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2019 within each respective timeframe required by the SEC, meaning we have not remained current in our reporting requirements with the SEC. This limits our ability to access the public markets to raise debt or equity capital, which could prevent us from pursuing transactions or implementing business strategies that we might otherwise believe are beneficial to our business. We are not currently eligible to use a registration statement on Form S-3 that would allow us to continuously incorporate by reference our SEC reports into the registration statement, or to use “shelf” registration statements to conduct offerings, until approximately one year from the date we regain and maintain status as a current filer. If we wish to pursue a public offering now, we would be required to file a registration statement on Form S-1 and have it reviewed and declared effective by the SEC. Doing so would likely take significantly longer than using a registration statement on Form S-3 and increase our ~~transaction~~borrowing costs, and the necessity of using a Form S-1 for a public offering of registered securities could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our ability to raise capital or complete acquisitions of other companies in a timely manner.

In addition, as a result of the failure to remain current in our reporting requirements with the SEC, we are not currently eligible to use Form S-8 registration statements. As a result, on April 23, 2019, the administrator of the Plan issued a notice to Plan participants advising participants of a blackout period during which participants are prohibited from acquiring beneficial ownership of additional interests in The Kraft Heinz Company Stock Fund. If we are not able to become and remain current in our reporting requirements with the SEC, it restricts our ability to maintain The Kraft Heinz Company Stock Fund or issue other equity securities to our employees.

As previously disclosed, we also received notices from Nasdaq regarding our noncompliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC. We timely submitted our plan to regain compliance, and Nasdaq granted the Company until September 11, 2019 to regain compliance, subject to our compliance with certain terms outlined in the notice received on May 15, 2019, including filing this Annual Report on Form 10-K for the fiscal year ended December 29, 2018 and filing our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2019, which we expect to file as promptly as practicable following the filing of this Annual Report on Form 10-K. If we are not able to file before September 11, 2019, however, our common stock may be subject to delisting by Nasdaq.

We reached a determination to restate certain of our previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investor confidence and raise reputational issues.

~~As discussed in the Explanatory Note, in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, and in Note 23,~~ ~~Quarterly Financial Data (Unaudited)~~, in this Annual Report on Form 10-K, we reached a determination to restate our consolidated financial statements and related disclosures for the years ended December 30, 2017 and December 31, 2016 and to restate each of the quarterly and year-to-date periods for the nine months ended September 29, 2018 and for fiscal year 2017, following the identification of misstatements as a result of the internal investigation conducted. We do not believe that the misstatements are quantitatively material to any period presented in our prior financial statements. However, due to the qualitative nature of the matters identified in our internal investigation, including the number of years over which the misconduct occurred and the number of transactions, suppliers, and procurement employees involved, we determined that it would be appropriate to correct the misstatements in our previously issued consolidated financial statements by restating such financial statements. The restatement also included corrections for additional identified out-of-period and uncorrected misstatements in the impacted periods. As a result, we have incurred unanticipated costs for accounting and legal fees in connection with or related to the restatement, and have become subject to a number of additional risks and uncertainties, which may affect investor confidence in the accuracy of our financial disclosures and may raise reputational issues for our business.

~~Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands.~~

We consider our intellectual property rights, particularly and most notably our trademarks, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be a significant and valuable aspect of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright, trade secret, and trade dress laws, as well as licensing agreements, third-party nondisclosure and assignment agreements, and policing of third-party misuses of our intellectual property. Our failure to develop or adequately protect our trademarks, products, new features of our products, or our technology, or any change in law or other changes that serve to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness and could materially ~~harm our business~~ and financial condition. We also license certain intellectual property, most notably trademarks, from third parties. To the extent that we are not able to contract with these third parties on favorable terms or maintain our relationships with these third parties, our rights to use certain intellectual property could be impacted.

~~Changes in tax laws and interpretations could adversely affect our business.~~

We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, which represents the majority of our operations, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. For example, the Tax Cuts and Jobs Act (the “U.S. Tax Reform”) enacted on December 22, 2017 resulted in changes in our corporate tax rate, our deferred income taxes, and the taxation of foreign earnings. The comprehensive impact of U.S. Tax Reform is yet to be determined, and future guidance and interpretations may have adverse or uncertain effects. Relatedly, changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address base erosion and profit sharing (“BEPS”) could impact our effective tax rate. It is not currently possible to accurately determine the potential comprehensive impact of these or future changes, but these changes could have a material impact on our business and financial condition.

Significant judgment, knowledge, and experience are required in determining our worldwide provision for income taxes. Our future effective tax rate is impacted by a number of factors including changes in the valuation of our deferred tax assets and liabilities, changes in geographic mix of income, increases in expenses not deductible for tax, including impairment of goodwill, and changes in available tax credits. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are also regularly subject to audits by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. Economic and political pressures to increase tax revenue in various jurisdictions may make resolving tax disputes more difficult. The results of an audit or litigation could adversely affect our financial ~~statements~~condition and operating results. In February 2020, Moody’s Investor Services, Inc. (“Moody’s”) affirmed our long-term credit rating of Baa3 with a negative outlook and Fitch Ratings (“Fitch”) and S&P Global Ratings (“S&P”) downgraded our long-term credit rating from BBB- to BB+ with a stable outlook from Fitch and a negative outlook from S&P. The downgrades by Fitch and S&P reduce our senior debt below investment grade, potentially resulting in higher borrowing costs on future financings and limiting access to our commercial paper program and other sources of funding which may result in us having to use more expensive sources of liquidity, such as our Senior Credit Facility. These downgrades do not constitute a default or event of default under our debt instruments. As of the ~~period or periods for which that determination is made.~~date of this filing, we maintain a positive outlook from Fitch and S&P and a stable outlook from Moody’s.

Registered Securities Risks

Sales of our common stock in the public market could cause volatility in the price of our common stock or cause the share price to fall.

Sales of a substantial number of shares of our common stock in the public market, sales of our common stock by the Sponsors, or the perception that these sales might occur, could depress the market price of our common stock, and could impair our ability to raise capital through the sale of additional equity securities. A sustained depression in the market price of our common stock has happened ~~(in November and December 2018, which~~(which was a contributing factor to our decision to perform an interim impairment ~~test~~tests for certain reporting units and brands in ~~the fourth quarter of 2018,~~2019 for which we ultimately recorded impairment losses) and could in the future happen, which could also reduce our market capitalization below the book value of net assets, which could increase the likelihood of recognizing goodwill or indefinite-lived intangible asset impairment losses that could negatively affect our financial condition and results of operations.

Kraft Heinz, 3G ~~Capital,~~Global Food Holdings, and Berkshire Hathaway entered into a registration rights agreement requiring us to register for resale under the Securities Act all registrable shares held by 3G ~~Capital~~Global Food Holdings and Berkshire Hathaway, which represents all shares of our common stock held by the Sponsors as of the date of the closing of the 2015 Merger. As of December ~~29, 2018,~~25, 2021, registrable shares represented approximately ~~49%~~42% of all outstanding shares of our common stock. Although the registrable shares are subject to certain holdback and suspension periods, the registrable shares are not subject to a “lock-up” or similar restriction under the registration rights agreement. Accordingly, offers and sales of a large number of registrable shares may be made pursuant to an effective registration statement under the Securities Act in accordance with the terms of the registration rights agreement. Sales of our common stock by the Sponsors to other persons would likely result in an

increase in the number of shares being traded in the public market and may increase the volatility of the price of our common stock.

Our ability to pay regular dividends to our ~~shareholders~~stockholders and the amounts of any such dividends are subject to the discretion of the Board ~~of Directors~~ and may be limited by our financial condition, debt agreements, or limitations under Delaware law.

Although it is currently anticipated that we will continue to pay regular quarterly dividends, any such determination to pay dividends and the amounts thereof will be at the discretion of the Board ~~of Directors~~ and will be dependent on then-existing conditions, including our financial condition, income, legal requirements, including limitations under Delaware law, debt agreements, and other factors the Board ~~of Directors~~ deems relevant. The Board ~~of Directors~~ has previously decided, and may in the future decide, in its sole discretion, to change the amount or frequency of dividends or discontinue the payment of dividends entirely. For these reasons, ~~shareholders~~stockholders will not be able to rely on dividends to receive a return on investment. Accordingly, realization of any gain on shares of our common stock may depend on the appreciation of the price of our common stock, which may never occur.

General Risk Factors

Unanticipated business disruptions and natural events in the locations in which we or our customers, suppliers, distributors, or regulators operate could adversely affect our ability to provide products to our customers or our results of operations.

We have a complex network of suppliers, owned and leased manufacturing locations, co-manufacturing locations, distribution networks, and information systems that support our ability to consistently provide our products to our customers. Factors that are hard to predict or beyond our control, such as weather or other geological events or natural disasters (including hurricanes, earthquakes, floods, tsunamis, or wild fires), raw material shortages, fires or explosions, political unrest, geopolitical conflicts, terrorism, civil strife, acts of war, public corruption, expropriation, generalized labor unrest or labor shortages, or health pandemics (including COVID-19), could damage or disrupt our operations or the operations of our customers, suppliers, co-manufacturers, distributors, or regulators. These factors include, but are not limited to:

•natural disasters or other disruptions at any of our facilities or our suppliers’ or distributors’ facilities may impair or delay the delivery of our products; and

•influenza or other pandemics, such as COVID-19, could disrupt production of our products, reduce demand for certain of our products, or disrupt the marketplace in the away-from-home or retail environment with consequent material adverse effects on our results of operations.

These or other disruptions may require additional resources to restore our supply chain or distribution network. While we insure against many of these events and certain business interruption risks and have policies and procedures to manage business continuity planning, such insurance may not compensate us for any losses incurred and our business continuity plans may not effectively resolve the issues in a timely manner. To the extent we are unable to respond to disruptions in our operations, whether by finding alternative suppliers or replacing capacity at key manufacturing or distribution locations; to quickly repair damage to our information, production, or supply systems; or to financially mitigate the likelihood or potential impact of such events, or effectively manage them if they occur, we may be late in delivering, or unable to deliver, products to our customers or to track orders, inventory, receivables, and payables. If that occurs, our customers’ confidence in us and long-term demand for our products could decline. Any of these events could materially and adversely affect our product sales, financial condition, and results of operations.

Our performance may be adversely affected by economic and political conditions in the United States and in various other nations where we do business.

Our performance has been in the past and may continue in the future to be impacted by economic and political conditions in the United States and in other nations where we do business. Economic and financial uncertainties in our international markets, changes to major international trade arrangements, and the imposition of tariffs by certain foreign governments could negatively impact our operations and sales. For example, in 2020, the United Kingdom formally withdrew from the European Union (commonly referred to as “Brexit”) and subsequently entered into a trade agreement with the European Union, and we continue to monitor economic and political developments related to Brexit, including the potential for supply chain disruptions. Other factors impacting our operations in the United States and in international locations where we do business include export and import restrictions, foreign currency exchange rates, foreign currency devaluation, cash repatriation restrictions, recessionary conditions, foreign ownership restrictions, nationalization, the impact of hyperinflationary environments, terrorist acts, and political unrest. Such factors in either domestic or foreign jurisdictions, and our responses to them, could materially and adversely affect our product sales, financial condition, and operating results.

We rely on our management team and other key personnel and may be unable to hire or retain key personnel or a highly skilled and diverse global workforce.

We are significantly dependent on information technology, and we may be unable to protect our information systems against service interruption, misappropriation of data, or breaches of security.

We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial information, to manage a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements. We also depend on our information technology infrastructure for digital marketing activities and for electronic communications among our locations, personnel, customers, and suppliers. These information technology systems, some of which are managed by third parties, may be susceptible to damage, invasions, disruptions, or shutdowns due to hardware failures, computer viruses, hacker attacks and other cybersecurity risks, telecommunication failures, user errors, catastrophic events, or other factors. If our information technology systems suffer severe damage, disruption, or shutdown, by unintentional or malicious actions of employees and contractors or by cyberattacks, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, reputational damage, transaction errors, processing inefficiencies, the leakage of confidential information, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed.

Misuse, leakage, or falsification of information could result in violations of data privacy laws and regulations, damage to our reputation and credibility, loss of opportunities to acquire or divest of businesses or brands, and loss of our ability to commercialize products developed through research and development efforts and, therefore, could have a negative impact on net sales. In addition, we may suffer financial and reputational damage because of lost or misappropriated confidential information belonging to us, our current or former employees, or to our suppliers or consumers, and may become subject to legal action and increased regulatory oversight. We could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and information systems.

We are also subject to various laws and regulations that are continuously evolving and developing regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data. Such laws and regulations, as well as their interpretation and application, may vary from jurisdiction to jurisdiction, which can result in inconsistent or conflicting requirements. The European Union’s General Data Protection Regulation (“GDPR”), which became effective in May 2018, adds a broad array of requirements with respect to personal data, including the public disclosure of significant data breaches, and imposes substantial penalties for non-compliance. The California Consumer Privacy Act (“CCPA”), which became effective in January 2020, among other things, imposes additional requirements with respect to disclosure and deletion of personal information of California residents. The CCPA provides civil penalties for violations, as well as a private right of action for data breaches. GDPR, CCPA, and other privacy and data protection laws may increase our costs of compliance and risks of non-compliance, which could result in substantial penalties.

Our results could be adversely impacted as a result of increased pension, labor, and people-related expenses.

Inflationary pressures, shortages in the labor market, increased employee turnover, and changes in the availability of our workers could increase labor costs, which could have a material adverse effect on our consolidated operating results or financial condition. Our labor costs include the cost of providing employee benefits in the United States, Canada, and other foreign jurisdictions, including pension, health and welfare, and severance benefits. Any declines in market returns could adversely impact the funding of pension plans, the assets of which are invested in a diversified portfolio of equity and fixed-income securities and other investments. Additionally, the annual costs of benefits vary with increased costs of health care and the outcome of collectively bargained wage and benefit agreements.

We have observed an increasingly competitive labor market. Increased employee turnover, changes in the availability of our workers, including as a result of COVID-19-related absences, and labor shortages in our supply chain have resulted in, and could continue to result in, increased costs and have, and could again, impact our ability to meet consumer demand, both of which could negatively affect our financial condition, results of operations, or cash flows.

Changes in tax laws and interpretations could adversely affect our business.

We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, which represents the majority of our operations, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. Moreover, under the current U.S. presidential administration, comprehensive changes to U.S. federal income tax laws have been proposed, including, among others, a proposal to increase the federal tax on global intangible low-taxed income (“GILTI”). Additionally, the Organization for Economic Co-operation and Development (OECD), a global coalition of member countries, proposed a two-pillar plan to reform international taxation. The proposals aim to ensure a fairer distribution of profits among countries and impose a floor on tax competition through the introduction of a global minimum tax. It is not currently possible to accurately determine the potential comprehensive impact of these or future changes, but these changes could have a material impact on our effective tax rate, financial condition, and business.

Volatility of capital markets or macroeconomic factors could adversely affect our business.

Changes in financial and capital markets, including market disruptions, limited liquidity, ~~uncertainty regarding Brexit,~~ and interest rate volatility, ~~including as a result of the use or discontinued use of certain benchmark rates such as LIBOR,~~ may increase the cost of financing as well as the risks of refinancing maturing debt. ~~In addition,~~Our U.S. dollar variable rate debt uses London Interbank Offered Rate (“LIBOR”) as a benchmark for determining interest rates and the Financial Conduct Authority in the United Kingdom intends to phase out the LIBOR rates associated with our ~~borrowing costs can be affected~~outstanding variable rate debt by ~~short~~the end of June 2023. Based on our review of our debt securities, credit facilities, including our uncommitted revolving credit line, derivative instruments, and ~~long-term ratings assigned by rating organizations. A decrease~~certain of our significant commercial contracts that may utilize LIBOR as the reference rate, we do not currently expect that the transition from LIBOR, including any legal or regulatory changes made in ~~these ratings could limit~~response to its future phase out, or the risks related to its discontinuance will have a material effect on our ~~access~~financing costs. However, we continue to ~~capital markets and increase our borrowing costs,~~evaluate the potential impact, which ~~could materially and adversely affect our financial condition and operating results.~~remains subject to uncertainty.

Some of our customers and counterparties are highly leveraged. Consolidations in some of the industries in which our customers operate have created larger customers, some of which are highly leveraged and facing increased competition and continued credit market volatility. These factors have caused some customers to be less profitable, increasing our exposure to credit risk. A significant adverse change in the financial and/or credit position of a customer or counterparty could require us to assume greater credit risk relating to that customer or counterparty and could limit our ability to collect receivables. This could have an adverse impact on our financial condition and liquidity.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate co-headquarters are located in Pittsburgh, Pennsylvania and Chicago, Illinois. Our co-headquarters are leased and house certain executive offices, our U.S. business units, and our administrative, finance, legal, and human resource functions. We maintain additional owned and leased offices throughout the regions in which we operate.

We manufacture our products in our network of manufacturing and processing facilities located throughout the world. As of December ~~29, 2018,~~25, 2021, we operated 8479 manufacturing and processing facilities. We own 8174 and lease ~~three~~five of these facilities. Our manufacturing and processing facilities count by segment as of December ~~29, 2018~~25, 2021 was:


	Owned	Leased		Owned	Leased
United States	40	1	United States	33	1
International			International	40	2
Canada	2	—	Canada	1	2
EMEA	12	—
Rest of World	27	2

~~The Kraft Heinz Company~~

~~Consolidated Statements of Cash Flows~~

~~(in millions)~~

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 938
$ 2,519
$ 2,213
CASH PAID DURING THE PERIOD FOR:
Interest $ 1,322
$ 1,269
$ 1,176
Income taxes 543
1,206
1,619

~~See accompanying notes to the consolidated financial statements.~~

The Kraft Heinz Company

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation

Organization

On July 2, 2015 (the “2015 Merger Date”), through a series of transactions, we consummated the merger of Kraft Foods Group, Inc. (“Kraft”) with and into a wholly-owned subsidiary of H.J. Heinz Holding Corporation (“Heinz”) (the “2015 Merger”). At the closing of the 2015 Merger, Heinz was renamed The Kraft Heinz ~~Company (“Kraft Heinz”).~~Company. Before the consummation of the 2015 Merger, Heinz was controlled by Berkshire Hathaway Inc. and 3G Global Food Holdings, LP ~~(“3G Global Food Holdings” and together with its affiliates, “3G Capital”~~(together, the “Sponsors”), following their acquisition of H. J. Heinz Company on June 7, ~~2013.~~2013 (the “2013 Heinz Acquisition”).

We operate on a 52- or 53-week fiscal year ending on the last Saturday in December in each calendar year. Unless the context requires otherwise, references to years and quarters contained herein pertain to our fiscal years and fiscal quarters. Our 2021 fiscal year was a 52-week period that ended on December 25, 2021, the 2020 fiscal year was a 52-week period that ended on December 26, 2020, and the 2019 fiscal year was a 52-week period that ended on December 28, 2019.

Principles of Consolidation

The consolidated financial statements include The Kraft Heinz ~~as well as~~Company and all of our ~~wholly-owned and majority-owned~~controlled subsidiaries. All intercompany transactions are eliminated.

Reportable Segments

We manage and report our operating results through ~~four segments. We have three~~3 reportable segments defined by geographic region: United States, ~~Canada,~~International, and Europe, Middle East, and Africa (“EMEA”). Our remaining businesses are combined and disclosed as “Rest of World.” Rest of World comprises two operating segments: Latin America and Asia Pacific (“APAC”).Canada.

Our segments reflect a change, effective in the first quarter of our fiscal year 2018, to reorganize our international businesses to better align our global geographies. We moved our Middle East and Africa businesses from the historical Asia Pacific, Middle East, and Africa (“AMEA”) operating segment into the historical Europe reportable segment, forming the new EMEA reportable segment. The remaining businesses from the AMEA operating segment became the APAC operating segment. We have reflected this change in all historical periods presented. See Note 22, ~~Segment Reporting, for our financial information by segment.~~

~~Held for Sale~~

InDuring the fourth quarter of ~~2018,~~2021, certain organizational changes were announced that will impact our future internal reporting and reportable segments. As a result of these changes, we ~~announced~~plan to combine our ~~plans~~United States and Canada zones to ~~divest certain assets~~form the North America zone, and ~~operations, predominantly~~expect to have 2 reportable segments, North America and International. We expect that any change to our reportable segments will be effective in ~~Canada~~the second quarter of 2022.

Considerations Related to COVID-19

The ongoing spread of COVID-19 throughout the United States and ~~India. At December 29, 2018,~~internationally, as well as measures implemented by governmental authorities and private businesses in an attempt to minimize transmission of the virus (including social distancing mandates, shelter-in-place orders, vaccine mandates, and business restrictions and shutdowns) and consumer responses to such measures and the pandemic have had and continue to have negative and positive implications for portions of our business. Though many areas have relaxed restrictions, varying levels remain throughout the world, are continuously evolving, and may be increased, including as a result of further outbreaks, resurgences, or the emergence of new variants.

In the preparation of these financial statements and related disclosures we have ~~classified~~assessed the ~~assets~~impact that COVID-19 has had on our estimates, assumptions, forecasts, and ~~liabilities~~accounting policies and made additional disclosures, as necessary. As COVID-19 and its impacts are unprecedented and ever evolving, future events and effects related to ~~these disposal groups as held for sale in our consolidated balance sheets. These assets~~the pandemic cannot be determined with precision and ~~liabilities are included in assets held for sale within current assets and liabilities held for sale within current liabilities.~~ actual results could significantly differ from estimates or forecasts.

See Note 5, ~~Acquisitions~~9, Goodwill and ~~Divestitures~~Intangible Assets, and Note 17, Debt, for ~~additional information.~~further discussion of COVID-19 considerations.

Use of Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which requires us to make accounting policy elections, estimates, and assumptions that affect the reported amount of assets, liabilities, reserves, and expenses. These accounting policy elections, estimates, and assumptions are based on our best estimates and judgments. We evaluate our policy elections, estimates, and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates to be reasonable given the current facts available. We adjust our policy elections, estimates, and assumptions when facts and circumstances dictate. Market volatility, including foreign currency exchange rates, increases the uncertainty inherent in our estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our consolidated financial statements.

Reclassifications

We made reclassifications and adjustments to certain previously reported financial information to conform to our current period presentation.

~~Note 2. Restatement~~ In the first quarter of ~~Previously Issued Consolidated Financial Statements~~

~~We have restated herein~~2021, we reclassified certain balances, which were previously reported in prepaid expenses, to inventories on our ~~audited~~ consolidated balance sheets. Certain financial ~~statements~~statement line items in our consolidated balance sheet at December ~~30, 2017~~26, 2020 and ~~for the years ended December 30, 2017 and December 31, 2016. We have also restated impacted amounts within the accompanying footnotes to the consolidated financial statements.~~

~~Restatement Background~~

As previously disclosed on February 21, 2019, we received a subpoena from the Securities and Exchange Commission (“SEC”) in October 2018 related to our procurement area, specifically the accounting policies, procedures, and internal controls related to our procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to agreements with our suppliers. Following the receipt of this subpoena, we, together with external counsel and forensic accountants, and subsequently, under the oversight of the Audit Committee of our Board of Directors (the “Audit Committee”), conducted an internal investigation into the procurement area and related matters. As a result of the findings from this internal investigation, which is now complete and which identified that multiple employees in the procurement area engaged in misconduct, we corrected prior period misstatements that generally increased the total cost of products sold in prior financial periods. These misstatements principally related to the incorrect timing of when certain cost and rebate elements associated with supplier contracts and related arrangements were initially recognized.

In connection with the internal investigation, we also conducted a comprehensive review of supplier contracts and related arrangements to identify other potential misstatements in the timing of the recognition of supplier rebates, incentive payments, and pricing arrangements. The review identified further misstatements, which we also investigated and have been unable to conclude if they resulted from the misconduct described above. These misstatements are described in more detail in restatement reference (a) below.

Our internal investigation and review identified adjustments that resulted in an understatement of cost of products sold totaling $208 million, including misstatements of $175 million relating to the periods up through September 29, 2018 that are being restated in this Annual Report on Form 10-K. The misstatements of cost of products sold related to our internal investigation and review included $22 million for fiscal year 2018, $94 million for fiscal year 2017, $35 million for fiscal year 2016, and $24 million for fiscal year 2015. We do not believe that the misstatements are quantitatively material to any period presented in our prior financial statements. However, due to the qualitative nature of the matters identified in our internal investigation, including the number of years over which the misconduct occurred and the number of transactions, suppliers, and procurement employees involved, we determined that it would be appropriate to correct the misstatements in our previously issued consolidated financial statements by restating such financial statements. The restatement also included corrections for additional identified out-of-period and uncorrected misstatements in the impacted periods.

~~Accordingly, we have restated herein~~ our consolidated ~~financial statements at December 30, 2017 and for the fiscal years ended December 30, 2017 and December 31, 2016, in accordance with Accounting Standards Codification (“ASC”) Topic 250,~~ ~~Accounting Changes and Error Corrections~~. In addition to the misstatements related to the supplier contracts and related arrangements, including the misstatements related to lease classification described in restatement reference (b) below, we corrected additional identified out-of-period and uncorrected misstatements that were not material, individually or in the aggregate, to our consolidated financial statements. These misstatements were related to customer incentive program expense misclassifications, balance sheet misclassifications, income taxes, impairments, and other misstatements, all of which are described in more detail in restatement references (c) through (g) below.

The restated interim financial information for the relevant unaudited interim financial information for the quarterly periods ended September 29, 2018, June 30, 2018, March 31, 2018, December 30, 2017, September 30, 2017, July 1, 2017, and April 1, 2017, is included in Note 23, ~~Quarterly Financial Information (Unaudited). The categories of misstatements and their impact on our previously issued consolidated financial statements are described in more detail below.~~

~~Description of Misstatements~~

~~Misstatements Associated with Supplier Contracts and Related Arrangements~~

~~(a) Supplier Rebates~~

We recorded adjustments to correct the misstatements found as a result of the internal investigation related to procurement described above. In connection with the internal investigation, we also conducted a comprehensive review of supplier contracts and related arrangements to identify other potential misstatements in the timing of the recognition of supplier rebates, incentive payments, and pricing arrangements. The review identified further misstatements, which we also investigated and have been unable to conclude if they resulted from the misconduct described above. These misstatements were primarily related to certain supplier contracts and related arrangements where the allocation of value of all or a portion of rebates and up-front payments to contractual elements in the current period should have been deferred and recognized over an applicable contractual period. We corrected these misstatements to defer the up-front consideration from suppliers when the retention or receipt of that consideration was contingent upon future events and to correctly recognize the consideration as a reduction of cost of products sold over the terms of the arrangements with the suppliers. The impacts of the supplier rebate misstatements on each period are discussed in restatement reference (a) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~(b) Capital Leases~~

As part of our review of supplier contracts and related arrangements in connection with the internal investigation, we evaluated additional elements of such arrangements, including the classification of embedded lease provisions as capital or operating. We had initially classified certain embedded lease provisions as capital leases and allocated their fixed consideration to the lease components. As a result of our analysis, and also taking into consideration, among other elements, the total value of supplier contracts and related arrangements, we determined that the classification of the embedded lease element for certain contracts should have been classified as an operating lease instead of a capital lease. In addition, we identified certain arrangements that were improperly accounted for as embedded capital leases. The impacts of the capital lease misstatements on each period are discussed in restatement reference (b) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~Additional Misstatements~~

~~(c) Customer Incentive Program Expense Misclassifications~~

As previously disclosed in March 2018, we retrospectively corrected immaterial misclassifications in our statements of income principally related to customer incentive program expense misclassifications. The impacts of the customer incentive program expense misclassifications on each period are discussed in restatement reference (c) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~(d) Balance Sheet Misclassifications~~

We recorded adjustments to recognize certain balance sheet misclassifications in the correct period. These adjustments primarily related to the classification of state income taxes, capital expenditures, and the classification of products held at co-packer locations. The impacts of the balance sheet misclassifications on each period are discussed in restatement reference (d) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~(e) Income Taxes~~

We recorded adjustments to recognize certain income tax items in the correct period, primarily deferred tax adjustments related to a Brazilian subsidiary, as well as return-to-provision adjustments and various other misclassifications. The income tax impacts of all misstatements outside of this category are included in their respective misstatement categories. The impacts of income tax misstatements on each period are discussed in restatement reference (e) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~(f) Impairments~~

We recorded an adjustment to recognize certain non-cash impairment losses in the correct period. In 2018, we had determined that a definite-lived intangible asset had been impaired in the fourth quarter of 2016 due to a license termination in that period and recorded an out-of-period correction to recognize the non-cash impairment loss. In addition, we recorded an adjustment to correct goodwill impairment losses related to our Australia and New Zealand reporting unit, which had been overstated. The impacts of the impairment misstatements on each period are discussed in restatement reference (f) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~(g) Other~~

We recorded adjustments to correct other identified out-of-period and uncorrected misstatements that were not material, individually or in the aggregate, to our consolidated financial statements. These other misstatements were primarily related to structured payable and product financing arrangements, postemployment benefit plans, inventory write-offs, certain accrued liabilities, and other misstatements within net sales and certain income tax and balance sheet accounts. The impacts of the other misstatements on each period are discussed in restatement reference (g) throughout this note and in Note 23, ~~Quarterly Financial Data (Unaudited)~~.

~~Description of Restatement Tables~~

~~The following tables represent our restated consolidated statements of income, statements of comprehensive income, statements of equity, and statements~~statement of cash flows for the years ended December ~~30, 2017~~26, 2020 and December ~~31, 2016,~~28, 2019 were adjusted, as ~~well~~necessary, to reflect these reclassifications. See Note 7, Inventories, for additional information.

Held for Sale

At December 25, 2021, we classified certain assets and liabilities as held for sale in our ~~restated~~ consolidated balance sheet, atincluding inventory in our International segment and certain manufacturing equipment and land use rights across the globe. At December ~~30, 2017.~~

~~Following the restated~~26, 2020, we classified certain assets and liabilities as held for sale in our consolidated ~~financial statement tables, we have presented a reconciliation from our prior periods as previously reported~~balance sheet, primarily relating to the ~~restated values. The values as previously reported for fiscal years 2017~~divestiture of certain of our cheese businesses, a business in our International segment, and ~~2016 were derived from our Annual Report on Form 10-K for~~certain manufacturing equipment and land use rights across the ~~fiscal year ended December 30, 2017 filed on February 16, 2018.~~

In addition, the statements of income for fiscal years 2017 and 2016, as previously reported, did not originally reflect the adoption of accounting standards update (“ASU”) 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). This ASU was adopted in the first quarter of 2018 and was applied retrospectively for statement of income presentation of service cost components and other net periodic benefit cost components. The restated statements of income for fiscal years 2017 and 2016 reflect the retrospective application of ASU 2017-07 and are labeled “As Recast.”globe. See Note 4, ~~New Accounting Standards~~Acquisitions and Divestitures, for additional ~~information related to our adoption of ASU 2017-07.~~information.

~~The Kraft Heinz Company~~

~~Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Year Ended December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 26,232
$ (156 ) (c)(g) $ 26,076
$ —
$ 26,076
Cost of products sold 16,529
(44 ) (a)(b)(c)(g) 16,485
558
17,043
Gross profit 9,703
(112 ) 9,591
(558 ) 9,033
Selling, general and administrative expenses, excluding impairment losses 2,881
(32 ) (c)(g) 2,849
78
2,927
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses 49
—
(f) 49
—
49
Selling, general and administrative expenses 2,930
(32 ) 2,898
78
2,976
Operating income/(loss) 6,773
(80 ) 6,693
(636 ) 6,057
Interest expense 1,234
—
(b)(g) 1,234
—
1,234
Other expense/(income), net 9
—
9
(636 ) (627 )
Income/(loss) before income taxes 5,530
(80 ) 5,450
—
5,450
Provision for/(benefit from) income taxes (5,460 ) (22 ) (a)(b)(e)(f)(g) (5,482 ) —
(5,482 )
Net income/(loss) 10,990
(58 ) 10,932
—
10,932
Net income/(loss) attributable to noncontrolling interest (9 ) —
(9 ) —
(9 )
Net income/(loss) attributable to Kraft Heinz 10,999
(58 ) 10,941
—
10,941
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 10,999
$ (58 ) $ 10,941
$ —
$ 10,941
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 9.03
$ (0.05 ) $ 8.98
$ —
$ 8.98
Diluted earnings/(loss) 8.95
(0.04 ) 8.91
—
8.91

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $94 million and an increase to benefit from income taxes of $18 million for the year ended December 30, 2017.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to cost of products sold of less than $1 million, a decrease to interest expense of less than $1 million, and a decrease to benefit from income taxes of less than $1 million for the year ended December 30, 2017.

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $147 million, a decrease to cost of products sold of $139 million, and a decrease to selling, general and administrative expenses (“SG&A”) of $8 million for the year ended December 30, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to benefit from income taxes of $12 million for the year ended December 30, 2017.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of less than $1 million and a decrease to benefit from income taxes of less than $1 million for the year ended December 30, 2017.

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $9 million, an increase to cost of products sold of $1 million, a decrease to SG&A of $24 million, a decrease to interest expense of less than $1 million, and a decrease to benefit from income taxes of $8 million for the year ended December 30, 2017.

~~The values as previously reported for the year ended December 30, 2017 were derived from our Annual Report on Form 10-K for the year ended December 30, 2017 filed on February 16, 2018.~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Year Ended December 31, 2016
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 26,487
$ (187 ) (c)(g) $ 26,300
$ —
$ 26,300
Cost of products sold 16,901
(116 ) (a)(c)(g) 16,785
369
17,154
Gross profit 9,586
(71 ) 9,515
(369 ) 9,146
Selling, general and administrative expenses, excluding impairment losses 3,444
(5 ) (c)(g) 3,439
88
3,527
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
18
(f) 18
—
18
Selling, general and administrative expenses 3,444
13
3,457
88
3,545
Operating income/(loss) 6,142
(84 ) 6,058
(457 ) 5,601
Interest expense 1,134
—
(g) 1,134
—
1,134
Other expense/(income), net (15 ) —
(g) (15 ) (457 ) (472 )
Income/(loss) before income taxes 5,023
(84 ) 4,939
—
4,939
Provision for/(benefit from) income taxes 1,381
(48 ) (a)(e)(f)(g) 1,333
—
1,333
Net income/(loss) 3,642
(36 ) 3,606
—
3,606
Net income/(loss) attributable to noncontrolling interest 10
—
10
—
10
Net income/(loss) attributable to Kraft Heinz 3,632
(36 ) 3,596
—
3,596
Preferred dividends 180
—
180
—
180
Net income/(loss) attributable to common shareholders $ 3,452
$ (36 ) $ 3,416
$ —
$ 3,416
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 2.84
$ (0.03 ) $ 2.81
$ —
$ 2.81
Diluted earnings/(loss) 2.81
(0.03 ) 2.78
—
2.78

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $35 million and a decrease to provision for income taxes of $13 million for the year ended December 31, 2016.

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $152 million, a decrease to cost of products sold of $145 million, and a decrease to SG&A of $7 million for the year ended December 31, 2016.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in a decrease to provision for income taxes of $18 million for the year ended December 31, 2016.~~

~~(f) Impairments—The correction of these misstatements resulted in an increase to SG&A of $18 million and a decrease to provision for income taxes of $4 million for the year ended December 31, 2016.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $35 million, a decrease to cost of products sold of $6 million, an increase to SG&A of $2 million, a decrease to interest expense of less than $1 million, a decrease to other expense/(income), net, of less than $1 million, and a decrease to provision for income taxes of $13 million for the year ended December 31, 2016.

~~The values as previously reported for the year ended December 31, 2016 were derived from our Annual Report on Form 10-K for the year ended December 30, 2017 filed on February 16, 2018.~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Year Ended December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 10,990
$ (58 ) (a)(b)(e)(f)(g) $ 10,932
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 1,184
1
(b)(e) 1,185
Net deferred gains/(losses) on net investment hedges (353 ) —
(353 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (113 ) —
(113 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 85
—
85
Net actuarial gains/(losses) arising during the period 69
—
69
Prior service credits/(costs) arising during the period 17
—
17
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (309 ) —
(309 )
Total other comprehensive income/(loss) 580
1
581
Total comprehensive income/(loss) 11,570
(57 ) 11,513
Comprehensive income/(loss) attributable to noncontrolling interest (3 ) —
(3 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 11,573
$ (57 ) $ 11,516

The $58 million decrease to net income was primarily driven by misstatements in the supplier rebates category, partially offset by misstatements in the income taxes, other, impairments, and capital leases categories. See additional descriptions of the net income impacts in the consolidated statement of income for the year ended December 30, 2017 section above.

~~The $1 million increase to foreign currency translation adjustments is the result of misstatements in the capital leases and income taxes categories.~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Year Ended December 31, 2016
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 3,642
$ (36 ) (a)(e)(f)(g) $ 3,606
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (986 ) 7
(d)(g)(e) (979 )
Net deferred gains/(losses) on net investment hedges 226
—
226
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges 46
—
46
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (87 ) —
(87 )
Net actuarial gains/(losses) arising during the period (40 ) —
(40 )
Prior service credits/(costs) arising during the period 97
(66 ) (g) 31
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (207 ) 3
(g) (204 )
Total other comprehensive income/(loss) (951 ) (56 ) (1,007 )
Total comprehensive income/(loss) 2,691
(92 ) 2,599
Comprehensive income/(loss) attributable to noncontrolling interest 16
—
16
Comprehensive income/(loss) attributable to Kraft Heinz $ 2,675
$ (92 ) $ 2,583

The $36 million decrease to net income was primarily driven by the misstatements in the other, supplier rebates, and impairments categories, partially offset by the misstatements in the income taxes category. See additional descriptions of the net income impacts in the consolidated statement of income for the year ended December 31, 2016 section above.

The $7 million increase to foreign currency translation adjustments is primarily the result of misstatements in the balance sheet misclassifications and the other misstatements categories, partially offset by misstatements in the income taxes category.

The $66 million decrease to prior service credits arising during the period and the $3 million increase to net postemployment benefit gains reclassified to net income are the result of misstatements in the other category.

~~The Kraft Heinz Company~~

~~Consolidated Balance Sheets~~

~~(in millions, except per share data)~~

December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 1,629
$ —
$ 1,629
Trade receivables (net of allowances of $23 at December 30, 2017) 921
—
921
Sold receivables 353
—
353
Income taxes receivable 582
(44 ) (a)(b)(d)(e)(g) 538
Inventories 2,815
(55 ) (d)(g) 2,760
Prepaid expenses 345
—
345
Other current assets 621
34
(a)(d) 655
Total current assets 7,266
(65 ) 7,201
Property, plant and equipment, net 7,120
(59 ) (b)(d)(g) 7,061
Goodwill 44,824
1
(g) 44,825
Intangible assets, net 59,449
(17 ) (f) 59,432
Other non-current assets 1,573
—
1,573
TOTAL ASSETS $ 120,232
$ (140 ) $ 120,092
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 460
$ 2
(g) $ 462
Current portion of long-term debt 2,743
(10 ) (b)(g) 2,733
Trade payables 4,449
(87 ) (d)(g) 4,362
Accrued marketing 680
9
(g) 689
Interest payable 419
—
419
Other current liabilities 1,381
108
(a)(d)(g) 1,489
Total current liabilities 10,132
22
10,154
Long-term debt 28,333
(25 ) (b) 28,308
Deferred income taxes 14,076
(37 ) (a)(d)(e)(f)(g) 14,039
Accrued postemployment costs 427
—
427
Other non-current liabilities 1,017
71
(a) 1,088
TOTAL LIABILITIES 53,985
31
54,016
Commitments and Contingencies

Redeemable noncontrolling interest 6
—
6
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,221 shares issued and 1,219 shares outstanding at December 30, 2017) 12
—
12
Additional paid-in capital 58,711
(77 ) (d) 58,634
Retained earnings/(deficit) 8,589
(94 ) (a)(b)(d)(e)(f)(g) 8,495
Accumulated other comprehensive income/(losses) (1,054 ) —
(1,054 )
Treasury stock, at cost (2 shares at December 30, 2017) (224 ) —
(224 )
Total shareholders' equity 66,034
(171 ) 65,863
Noncontrolling interest 207
—
207
TOTAL EQUITY 66,241
(171 ) 66,070
TOTAL LIABILITIES AND EQUITY $ 120,232
$ (140 ) $ 120,092

(a) Supplier Rebates—The correction of these misstatements resulted in a decrease to income taxes receivable of $1 million, a decrease to other current assets of $21 million, an increase to other current liabilities of $57 million, a decrease to deferred income taxes of $37 million, an increase to other non-current liabilities of $71 million, and a decrease to retained earnings of $113 million at December 30, 2017.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, a decrease to property, plant and equipment, net, of $34 million, a decrease to current portion of long-term debt of $9 million, a decrease to long-term debt of $25 million, and a decrease to retained earnings of less than $1 million at December 30, 2017.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in a decrease to income taxes receivable of $83 million, a decrease to inventories of $55 million, an increase to other current assets of $55 million, a decrease to property, plant and equipment, net, of $23 million, a decrease to trade payables of $23 million, a decrease to other current liabilities of $28 million, a decrease to deferred income taxes of $55 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at December 30, 2017.

(e) Income Taxes—The correction of these misstatements resulted in an increase to income taxes receivable of $33 million, an increase to deferred income taxes of $58 million, and a decrease to retained earnings of $25 million at December 30, 2017.

(f) Impairments—The correction of these misstatements resulted in a decrease to intangible assets, net, of $17 million, a decrease to deferred income taxes of $4 million, and a decrease to retained earnings of $13 million at December 30, 2017.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of $7 million, a decrease to inventories of less than $1 million, a decrease to property, plant and equipment, net, of $2 million, an increase to goodwill of $1 million, an increase to commercial paper and other short-term debt of $2 million, a decrease to current portion of long-term debt of $1 million, a decrease to trade payables of $64 million, an increase to accrued marketing of $9 million, an increase to other current liabilities of $79 million, an increase to deferred income taxes of $1 million, and a decrease to retained earnings of $20 million at December 30, 2017.

~~The Kraft Heinz Company~~

~~Consolidated Statement of Equity~~

~~For the Year Ended December 30, 2017~~

~~(in millions)~~

Restatement Reference Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
As Previously Reported
Balance at December 31, 2016 $ 12
$ 58,593
$ 588
$ (1,628 ) $ (207 ) $ 216
$ 57,574
Net income/(loss) excluding redeemable noncontrolling interest —
—
10,999
—
—
(5 ) 10,994
Other comprehensive income/(loss) —
—
—
574
—
6
580
Dividends declared-common stock ($2.45 per share) —
—
(2,988 ) —
—
—
(2,988 )
Dividends declared-noncontrolling interest ($52.75 per share) —
—
—
—
—
(10 ) (10 )
Exercise of stock options, issuance of other stock awards, and other —
118
(10 ) —
(17 ) —
91
Balance at December 30, 2017 $ 12
$ 58,711
$ 8,589
$ (1,054 ) $ (224 ) $ 207
$ 66,241
Restatement Impacts
Balance at December 31, 2016 $ —
$ (77 ) $ (36 ) $ (1 ) $ —
$ —
$ (114 )
Net income/(loss) excluding redeemable noncontrolling interest (a)(b)(e)(f)(g) —
—
(58 ) —
—
—
(58 )
Other comprehensive income/(loss) (b)(e) —
—
—
1
—
—
1
Dividends declared-common stock ($2.45 per share) —
—
—
—
—
—
—
Dividends declared-noncontrolling interest ($52.75 per share) —
—
—
—
—
—
—
Exercise of stock options, issuance of other stock awards, and other —
—
—
—
—
—
—
Balance at December 30, 2017 $ —
$ (77 ) $ (94 ) $ —
$ —
$ —
$ (171 )
As Restated
Balance at December 31, 2016 $ 12
$ 58,516
$ 552
$ (1,629 ) $ (207 ) $ 216
$ 57,460
Net income/(loss) excluding redeemable noncontrolling interest —
—
10,941
—
—
(5 ) 10,936
Other comprehensive income/(loss) —
—
—
575
—
6
581
Dividends declared-common stock ($2.45 per share) —
—
(2,988 ) —
—
—
(2,988 )
Dividends declared-noncontrolling interest ($52.75 per share) —
—
—
—
—
(10 ) (10 )
Exercise of stock options, issuance of other stock awards, and other —
118
(10 ) —
(17 ) —
91
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the year ended December 30, 2017 sections above.

~~The Kraft Heinz Company~~

~~Consolidated Statement of Equity~~

~~For the Year Ended December 31, 2016~~

~~(in millions)~~

Restatement Reference Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
As Previously Reported
Balance at January 3, 2016 $ 12
$ 58,375
$ —
$ (671 ) $ (31 ) $ 208
$ 57,893
Net income/(loss) excluding redeemable noncontrolling interest —
—
3,632
—
—
10
3,642
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(957 ) —
6
(951 )
Dividends declared-Series A Preferred Stock ($2,250.00 per share) —
—
(180 ) —
—
—
(180 )
Dividends declared-common stock ($2.35 per share) —
—
(2,862 ) —
—
—
(2,862 )
Dividends declared-noncontrolling interest ($90.82 per share) —
—
—
—
—
(8 ) (8 )
Exercise of stock options, issuance of other stock awards, and other —
218
(2 ) —
(176 ) —
40
Balance at December 31, 2016 $ 12
$ 58,593
$ 588
$ (1,628 ) $ (207 ) $ 216
$ 57,574
Restatement Impacts
Balance at January 3, 2016 (a)(d)(e)(g) $ —
$ (77 ) $ —
$ 55
$ —
$ —
$ (22 )
Net income/(loss) excluding redeemable noncontrolling interest (a)(e)(f)(g) —
—
(36 ) —
—
—
(36 )
Other comprehensive income/(loss) excluding redeemable noncontrolling interest (g) —
—
—
(56 ) —
—
(56 )
Dividends declared-Series A Preferred Stock ($2,250.00 per share) —
—
—
—
—
—
—
Dividends declared-common stock ($2.35 per share) —
—
—
—
—
—
—
Dividends declared-noncontrolling interest ($90.82 per share) —
—
—
—
—
—
—
Exercise of stock options, issuance of other stock awards, and other —
—
—
—
—
—
—
Balance at December 31, 2016 $ —
$ (77 ) $ (36 ) $ (1 ) $ —
$ —
$ (114 )
As Restated
Balance at January 3, 2016 $ 12
$ 58,298
$ —
$ (616 ) $ (31 ) $ 208
$ 57,871
Net income/(loss) excluding redeemable noncontrolling interest —
—
3,596
—
—
10
3,606
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(1,013 ) —
6
(1,007 )
Dividends declared-Series A Preferred Stock ($2,250.00 per share) —
—
(180 ) —
—
—
(180 )
Dividends declared-common stock ($2.35 per share) —
—
(2,862 ) —
—
—
(2,862 )
Dividends declared-noncontrolling interest ($90.82 per share) —
—
—
—
—
(8 ) (8 )
Exercise of stock options, issuance of other stock awards, and other —
218
(2 ) —
(176 ) —
40
Balance at December 31, 2016 $ 12
$ 58,516
$ 552
$ (1,629 ) $ (207 ) $ 216
$ 57,460

The $77 million decrease to additional paid-in capital was primarily driven by the misstatements in the income taxes, supplier rebates, and other categories, which resulted in a decrease to net income for the fiscal year ended January 3, 2016, which has been reflected as a reduction to additional paid-in capital rather than retained earnings due to certain dividends declared in 2015 without a corresponding amount in retained earnings.

The $55 million decrease to accumulated other comprehensive losses at January 3, 2016 was primarily driven by the misstatements in the other and income taxes categories, partially offset by the misstatements in the balance sheet reclassifications category.

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Year Ended December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 10,990
$ (58 ) (a)(b)(e)(f)(g) $ 10,932
Adjustments to reconcile net income/(loss) to operating cash flows:
Depreciation and amortization 1,036
(5 ) (b)(f)(g) 1,031
Amortization of postretirement benefit plans prior service costs/(credits) (328 ) —
(328 )
Equity award compensation expense 46
—
46
Deferred income tax provision/(benefit) (6,467 ) (28 ) (a)(e)(g) (6,495 )
Postemployment benefit plan contributions (1,659 ) —
(1,659 )
Goodwill and intangible asset impairment losses 49
—
49
Nonmonetary currency devaluation 36
—
36
Other items, net 219
34
(a)(g) 253
Changes in current assets and liabilities: —
—

Trade receivables (2,629 ) —
(2,629 )
Inventories (251 ) 15
(d) (236 )
Accounts payable 464
(23 ) (d) 441
Other current assets (67 ) 3
(a)(d) (64 )
Other current liabilities (912 ) 36
(a)(e)(g) (876 )
Net cash provided by/(used for) operating activities 527
(26 ) 501
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 2,286
—
2,286
Capital expenditures (1,217 ) 23
(d) (1,194 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 87
(2 ) (g) 85
Net cash provided by/(used for) investing activities 1,156
21
1,177
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,644 ) 3
(b)(g) (2,641 )
Proceeds from issuance of long-term debt 1,496
—
1,496
Proceeds from issuance of commercial paper 6,043
—
6,043
Repayments of commercial paper (6,249 ) —
(6,249 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (2,888 ) —
(2,888 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net 16
2
(g) 18
Net cash provided by/(used for) financing activities (4,226 ) 5
(4,221 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 57
—
57
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (2,486 ) —
(2,486 )
Balance at beginning of period 4,255
—
4,255
Balance at end of period $ 1,769
$ —
$ 1,769
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 2,519
$ —
$ 2,519
CASH PAID DURING THE PERIOD FOR:
Interest $ 1,269
$ —
$ 1,269
Income taxes 1,206
—
1,206

~~See descriptions of the net income impacts in the consolidated statement of income for the year ended December 30, 2017 section above.~~

The misstatements in the balance sheet misclassifications category resulted in a decrease to net cash flows provided by operating activities of $23 million and an increase to net cash flows provided by investing activities of $23 million for the year ended December 30, 2017.

The misstatements in the other misclassifications category resulted in a decrease to net cash flows provided by operating activities of $1 million, a decrease to net cash flows provided by investing activities of $2 million, and an increase to net cash flows provided by financing activities of $3 million for the year ended December 30, 2017.

The misstatements in the capital leases misclassifications category resulted in a decrease to net cash flows provided by operating activities of $2 million and an increase to net cash flows provided by financing activities of $2 million for the year ended December 30, 2017.

~~No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the year ended December 30, 2017.~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Year Ended December 31, 2016
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 3,642
$ (36 ) (a)(e)(f)(g) $ 3,606
Adjustments to reconcile net income/(loss) to operating cash flows:
Depreciation and amortization 1,337
—
1,337
Amortization of postretirement benefit plans prior service costs/(credits) (333 ) (14 ) (g) (347 )
Equity award compensation expense 46
—
46
Deferred income tax provision/(benefit) (29 ) (43 ) (a)(e)(f)(g) (72 )
Postemployment benefit plan contributions (494 ) —
(494 )
Goodwill and intangible asset impairment losses —
18
(f) 18
Nonmonetary currency devaluation 24
—
24
Other items, net 16
9
(a)(g) 25
Changes in current assets and liabilities: —
—

Trade receivables (2,055 ) —
(2,055 )
Inventories (130 ) —
(130 )
Accounts payable 943
(64 ) (d) 879
Other current assets (42 ) 1
(a) (41 )
Other current liabilities (276 ) 128
(a)(d)(e)(g) (148 )
Net cash provided by/(used for) operating activities 2,649
(1 ) 2,648
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 2,589
—
2,589
Capital expenditures (1,247 ) —
(1,247 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 110
—
110
Net cash provided by/(used for) investing activities 1,452
—
1,452
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (86 ) 1
(g) (85 )
Proceeds from issuance of long-term debt 6,981
—
6,981
Proceeds from issuance of commercial paper 6,680
—
6,680
Repayments of commercial paper (6,043 ) —
(6,043 )
Dividends paid - Series A Preferred Stock (180 ) —
(180 )
Dividends paid - common stock (3,584 ) —
(3,584 )
Redemption of Series A Preferred Stock (8,320 ) —
(8,320 )
Other financing activities, net (69 ) —
(69 )
Net cash provided by/(used for) financing activities (4,621 ) 1
(4,620 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (137 ) —
(137 )
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (657 ) —
(657 )
Balance at beginning of period 4,912
—
4,912
Balance at end of period $ 4,255
$ —
$ 4,255
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 2,213
$ —
$ 2,213
CASH PAID DURING THE PERIOD FOR:
Interest $ 1,176
$ —
$ 1,176
Income taxes 1,619
—
1,619

~~See descriptions of the net income impacts in the consolidated statement of income for the year ended December 31, 2016 section above.~~

The misstatements in the other misclassifications category resulted in a decrease to net cash flows provided by operating activities of $1 million and an increase to net cash flows provided by financing activities of $1 million for the year ended December 31, 2016.

~~No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the year ended December 31, 2016.~~

Note 3.2. Significant Accounting Policies

Revenue Recognition:

Our revenues are primarily derived from customer orders for the purchase of our products. We recognize revenues as performance obligations are fulfilled when control passes to our customers. We record revenues net of variable consideration, including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). We also record a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. We base these estimates principally on historical and current period experience factors. We recognize costs paid to third party brokers to obtain contracts as expenses as our contracts are generally less than one year.

Advertising, Consumer Incentives, and Trade Promotions:

We promote our products with advertising, consumer incentives, and performance obligations related to trade promotions. Consumer incentives and trade promotions include, but are not limited to, discounts, coupons, rebates, performance-based in-store display activities, and volume-based incentives. Variable consideration related to consumer incentive and trade promotion activities is recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization, redemption rates, and/or current period experience factors. We review and adjust these estimates at least quarterly based on actual experience and other information.

Advertising expenses are recorded in selling, general and administrative expenses (“SG~~&A.~~&A”). For interim reporting purposes, we charge advertising to operations as a percentage of estimated full year sales activity and marketing costs. We then review and adjust these estimates each quarter based on actual experience and other information. ~~We recorded~~In 2021, we updated our definition of advertising expenses to reflect a more comprehensive view of ~~$584 million~~costs that promote our brands to create or stimulate a desire to buy our products. Our definition of advertising expenses now includes advertising production costs, in-store advertising costs, agency fees, brand promotions and events, and sponsorships, in ~~2018, $629 million in 2017, and $708 million in 2016, which represented~~addition to costs to obtain ~~physical advertisement spots~~advertising in television, radio, print, digital, and social channels. We have reflected these changes in all historical periods presented. We recorded advertising expenses of $1,039 million in 2021, $1,070 million in 2020, and $976 million in 2019. We also incur ~~other~~market research costs, which are recorded in SG&A but are excluded from advertising and marketing costs such as shopper marketing, sponsorships, and agency advertisement conception, design, and public relations fees. Total advertising and marketing costs were $1,140 million in 2018, $1,115 million in 2017, and $1,221 million in 2016.expenses.

Research and Development Expense:

We expense costs as incurred for product research and development within SG&A. Research and development expenses were approximately ~~$109~~$140 million in ~~2018, $93~~2021, $119 million in ~~2017,~~2020, and ~~$120~~$112 million in ~~2016.~~2019.

Stock-Based Compensation:

We recognize compensation costs related to equity awards on a straight-line basis over the vesting period of the award, which is generally three to five ~~years.~~years, or on a straight-line basis over the requisite service period for each separately vesting portion of the awards. These costs are primarily recognized within SG&A. We estimate expected forfeitures rather than recognizing forfeitures as they occur in determining our equity award compensation costs. We classify equity award compensation costs primarily within general corporate expenses. See Note ~~12,~~ 11, Employees’ Stock Incentive Plans, for additional information.

Postemployment Benefit Plans:

We maintain various retirement plans for the majority of our employees. These include pension benefits, postretirement health care benefits, and defined contribution benefits. The cost of these plans is charged to expense over an appropriate term based on, among other things, the cost component and whether the plan is active or inactive. Changes in the fair value of our plan assets result in net actuarial gains or losses. These net actuarial gains and losses are deferred into accumulated other comprehensive income/(losses) and amortized within other expense/(income)~~, net~~ in future periods using the corridor approach. The corridor is 10% of the greater of the market-related value of the plan’s asset or projected benefit obligation. Any actuarial gains and losses in excess of the corridor are then amortized over an appropriate term based on whether the plan is active or inactive. See Note ~~13,~~ 12, Postemployment Benefits, for additional information.

Income Taxes:

We recognize income taxes based on amounts refundable or payable for the current year and record deferred tax assets or liabilities for any difference between the financial reporting and tax basis of our assets and liabilities. We also recognize deferred tax assets for temporary differences, operating loss carryforwards, and tax credit carryforwards. Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes. Realization of certain deferred tax assets, primarily net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.

We apply a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. Accordingly, we recognize the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. Future changes in judgment related to the expected ultimate resolution of uncertain tax positions will affect our results in the quarter of such change.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for/(benefit from) income taxes. The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period, but is not expected to be material to our financial position.

Common Stock and Preferred Stock Dividends:

Dividends are recorded as a reduction to retained earnings. When we have an accumulated deficit, dividends are recorded as a reduction of additional paid-in capital.

Cash and Cash Equivalents:

Cash equivalents include ~~demand~~term deposits with banks, money market funds, and all highly liquid investments with original maturities of three months or less. The fair value of cash equivalents approximates the carrying amount. Cash and cash equivalents that are legally restricted as to withdrawal or usage is classified in other current assets or other non-current assets, as applicable, on the consolidated balance sheets.

Inventories:

Inventories are stated at the lower of cost or net realizable value. We value inventories primarily using the average cost method.

Property, Plant and Equipment:

Property, plant and equipment are stated at historical cost and depreciated on the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from three years to 20 years and buildings and improvements over periods up to 40 years. Capitalized software costs are included in property, plant and equipment if we have the contractual right to take possession of the software at any time and it is feasible for us to either run the software on our own hardware or contract with a third party to host the software. These costs are amortized on a straight-line basis over the estimated useful lives of the software, which do not exceed seven years. We review long-lived assets for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. Such conditions could include significant adverse changes in the business climate, current-period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of assets held for use, we group assets at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

Hosted Cloud Computing Arrangement that is a Service Contract:

Deferred implementation costs for hosted cloud computing service arrangements are stated at historical cost and amortized on a straight-line basis over the term of the hosting arrangement that the implementation costs relate to. Deferred implementation costs for these arrangements are included in prepaid expenses and amortized to SG&A. The corresponding cash flows related to these arrangements will be reported within operating activities. We review the deferred implementation costs for impairment when we believe the deferred costs may no longer be recoverable. Such conditions could include situations where the arrangement is not expected to provide substantive service potential, a significant change occurs in the manner in which the arrangement is used or expected to be used, including early cancellation or termination of the arrangement, or situations where the arrangement has had, or will have, a significant change made to it. In instances where we have concluded that an impairment exists, we accelerate the deferred costs on the consolidated balance sheet for immediate expense recognition in SG&A.

Goodwill and Intangible Assets:

~~Our goodwill balance consists of 20~~We maintain 14 reporting units, ~~and~~9 of which comprise our goodwill balance. Our indefinite-lived intangible asset balance primarily consists of a number of individual brands. We test our reporting units and brands for impairment annually as of the first day of our second quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections, ~~(for example due to regulatory or industry changes),~~ disposals of significant brands or components of our business, unexpected business disruptions (for example due to a natural disaster, pandemic, or loss of a customer, supplier, or other significant business relationship), unexpected significant declines in operating results, or significant adverse changes in the markets in which we ~~operate.~~operate, changes in income tax rates, changes in interest rates, or changes in management strategy. We test reporting units for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. We test brands for impairment by comparing the estimated fair value of each brand with its carrying amount. If the carrying amount of a reporting unit or brand exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount, in the case of reporting units, not to exceed to the associated carrying amount of goodwill.

Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited. We review definite-lived intangible assets for impairment when conditions exist that indicate the carrying amount of the assets may not be recoverable. Such conditions could include significant adverse changes in the business climate, current-period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of definite-lived intangible assets held for use, we group assets at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on definite-lived intangible assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

See Note ~~10,~~ 9, Goodwill and Intangible Assets, for additional information.

Leases:

We determine whether a contract is or contains a lease at contract inception based on the presence of identified assets and our right to obtain substantially all the economic benefit from or to direct the use of such assets. When we determine a lease exists, we record a right-of-use (“ROU”) asset and corresponding lease liability on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized at the lease commencement date at the value of the lease liability and are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. Lease liabilities are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term. As the discount rate implicit in the lease is not readily determinable in most of our leases, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets.

We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense over the shorter of the estimated useful life of the underlying assets or the lease term. In instances of title transfer, expense is recognized over the useful life. Interest expense on a finance lease is recognized using the effective interest method over the lease term.

We have lease agreements with non-lease components that relate to the lease components (e.g., common area maintenance such as cleaning or landscaping, insurance, etc.). We account for each lease and any non-lease components associated with that lease as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease costs.

Certain leasing arrangements require variable payments that are dependent on usage or output or may vary for other reasons, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the ROU asset and lease liability and are recognized as expense in the period in which the payment occurs.

Our lease agreements do not include significant restrictions or covenants, and residual value guarantees are generally not included within our leases.

Financial Instruments:

As we source our commodities on global markets and periodically enter into financing or other arrangements abroad, we use a variety of risk management strategies and financial instruments to manage commodity price, foreign currency exchange rate, and interest rate risks. Our risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on our operating results. One way we do this is through actively hedging our risks through the use of derivative instruments. As a matter of policy, we do not use highly leveraged derivative instruments, nor do we use financial instruments for speculative purposes.

Derivatives are recorded on our consolidated balance sheets as assets or liabilities at fair value, which fluctuates based on changing market conditions.

Certain derivatives are designated as cash flow hedges and qualify for hedge accounting treatment, while others are not designated as hedging instruments and are marked to market through net income/(loss). The gains and losses on cash flow hedges are deferred as a component of accumulated other comprehensive income/(losses) and are recognized in net income/(loss) at the time the hedged item affects net income/(loss), in the same line item as the underlying hedged item. The excluded component on cash flow hedges is recognized in net income/(loss) over the life of the hedging relationship in the same income statement line item as the underlying hedged item. We also designate certain derivatives and non-derivatives as net investment hedges to hedge the net assets of certain foreign subsidiaries which are exposed to volatility in foreign currency exchange rates. Changes in the value of these derivatives and remeasurements of our non-derivatives designated as net investment hedges are calculated each period using the spot method, with changes reported in foreign currency translation adjustment within accumulated other comprehensive income/(losses). Such amounts will remain in accumulated other comprehensive income/(losses) until the complete or substantially complete liquidation of our investment in the underlying foreign operations. The excluded component on derivatives designated as net investment hedges is recognized in net income/(loss) within interest expense. The income statement classification of gains and losses related to derivative instruments not designated as hedging instruments is determined based on the underlying intent of the contracts. Cash flows related to the settlement of derivative instruments designated as net investment hedges of foreign operations are classified in the consolidated statements of cash flows within investing activities. All other cash flows related to derivative instruments are classified in the same line item as the cash flows of the related hedged item, which is generally within operating activities.

To qualify for hedge accounting, a specified level of hedging effectiveness between the hedging instrument and the item being hedged must be achieved at inception and maintained throughout the hedged period. When a hedging instrument no longer meets the specified level of hedging effectiveness, we reclassify the related hedge gains or losses previously deferred into other comprehensive income/(losses) to net ~~income~~income/(loss) within other expense/(income)~~, net.~~. We formally document our risk management objectives, our strategies for undertaking the various hedge transactions, the nature of and relationships between the hedging instruments and hedged items, and the method for assessing hedge effectiveness. Additionally, for qualified hedges of forecasted transactions, we specifically identify the significant characteristics and expected terms of the forecasted transactions. If it becomes probable that a forecasted transaction will not occur, the hedge will no longer be effective and all of the derivative gains or losses would be recognized in net ~~income~~income/(loss) in the current period.

Unrealized gains and losses on our commodity derivatives not designated as hedging instruments are recorded in cost of products sold and are included within general corporate expenses until realized. Once realized, the gains and losses are included within the applicable segment operating results. See Note ~~14,~~ 13, Financial Instruments, for additional information.

Our designated and undesignated derivative contracts include:

•Net investment hedges. We have numerous investments in our foreign subsidiaries, the net assets of which are exposed to volatility in foreign currency exchange rates. We manage this risk by utilizing derivative and non-derivative instruments, including cross-currency swap contracts, foreign exchange contracts, and certain foreign denominated debt designated as net investment hedges. We exclude the interest accruals and any off-market values on cross-currency swap contracts and the forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals and any amortization of off-market values on cross-currency swap contracts in net income/(loss) within interest expense. We amortize the forward points on foreign exchange contracts into net income/(loss) within interest expense over the life of the hedging relationship.

•Foreign currency cash flow hedges. We use various financial instruments to mitigate our exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions. Our principal foreign currency exposures that are hedged include the euro, British pound sterling, ~~euro,~~ and Canadian dollar. These instruments include cross-currency swap contracts and foreign exchange forward and option contracts. Substantially all of these derivative instruments are highly effective and qualify for hedge accounting treatment. We exclude the interest accruals on cross-currency swap contracts (when interest is not a hedged item) and the forward points and option premiums or discounts on foreign exchange contracts from the assessment and measurement of hedge effectiveness and amortize such amounts into net income/(loss) in the same line item as the underlying hedged item over the life of the hedging relationship.

•Interest rate cash flow hedges. From time to time, we have used derivative instruments, including interest rate swaps, as part of our interest rate risk management strategy. We have primarily used interest rate swaps to hedge the variability of interest payment cash flows on a portion of our future debt obligations.

•Commodity derivatives. We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. We enter into commodity purchase contracts primarily for ~~dairy~~vegetable oils, corn products, sugar, coffee beans, wheat products, meat products, ~~coffee beans, sugar, vegetable oils, wheat products, corn~~dairy products, and cocoa products. These commodity purchase contracts generally are not subject to the accounting requirements for derivative instruments and hedging activities under the normal purchases and normal sales exception. We also use commodity futures, options, and swaps to economically hedge the price of certain commodity costs, including the commodities noted above, as well as diesel fuel, packaging products, ~~diesel fuel,~~ and natural gas. We do not designate these commodity contracts as hedging instruments. We also occasionally use futures to economically cross hedge a commodity exposure.

Translation of Foreign Currencies:

For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period end. Income statement accounts are translated at the average rate of exchange prevailing during the period. ~~Translation~~Foreign currency translation adjustments arising from the use of differing exchange rates from period to period are included as a component of accumulated other comprehensive income/(losses) on ~~the~~our consolidated balance sheet. Gains and losses from foreign currency transactions are included in net income/(loss) for the period.

Highly Inflationary Accounting:

We apply highly inflationary accounting if the cumulative inflation rate in an economy for a three-year period meets or exceeds 100%. Under highly inflationary accounting, the financial statements of a subsidiary are remeasured into our reporting currency (U.S. dollars) based on the legally available exchange rate at which we expect to settle the underlying transactions. Exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in ~~net income/(loss),~~other expense/(income) on our consolidated statement of income, rather than accumulated other comprehensive income/(losses) on ~~the~~our consolidated balance sheet, until such time as the economy is no longer considered highly inflationary. Certain non-monetary assets and liabilities are recorded at the applicable historical exchange rates. We apply highly inflationary accounting to the results of our subsidiaries in Venezuela and ~~Argentina.~~Argentina, which resulted in insignificant nonmonetary currency devaluation losses in other expense/(income) in 2021, 2020, and 2019. The net monetary assets of each of our ~~subsidiary~~subsidiaries in Venezuela and Argentina were ~~approximately $2 million~~insignificant at December ~~29, 2018. See Note 16,~~ 25, 2021. Our results of operations in both Venezuela ~~- Foreign Currency~~ and ~~Inflation, for additional information related to our subsidiary in Venezuela.~~Argentina reflect those of controlled subsidiaries.

Note 4.3. New Accounting Standards

Accounting Standards Adopted in the Current Year

~~Presentation of Net Periodic Benefit Costs:~~Simplifying the Accounting for Income Taxes:

In ~~March 2017,~~December 2019, the Financial Accounting Standards Board ~~(the “FASB”~~(“FASB”) issued ~~ASU 2017-07~~Accounting Standards Update (“ASU”) 2019-12 to simplify the accounting in Accounting Standards Codification (“ASC”) 740, Income Taxes. This guidance removes certain exceptions related to the ~~presentation~~approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of ~~net periodic benefit cost (pension~~deferred tax liabilities for outside basis differences. This guidance also clarifies and ~~postretirement cost). This ASU became effective beginning~~simplifies other areas of ASC 740. Certain amendments in the first quarter of our fiscal year 2018. Under the new guidance, the service cost component of net periodic benefit cost must be presented in the same statement of income line item as other employee compensation costs arising from services rendered by employees during the period. Other components of net periodic benefit cost must be disaggregated from the service cost component in the statements of income and must be presented outside the operating income/(loss) subtotal. Additionally, only the service cost component is eligible for capitalization in assets. The new guidancethis update must be applied retrospectively for the statement of income presentation of service cost components and other net periodic benefit cost components and prospectively for the capitalization of service cost components. There ison a ~~practical expedient that allows us to use historical amounts disclosed in our~~ ~~Postemployment Benefits~~ ~~footnote as an estimation~~prospective basis, for retrospectively applying the statement of income presentation requirements. In the first quarter of 2018, we adopted this ASU using the practical expedient described above. There was no impact to our consolidated balance sheet at December 30, 2017 or to our consolidated statements of cash flows for the years ended December 30, 2017 and December 31, 2016. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for the impacts on our consolidated statements of income for the years ended December 30, 2017 and December 31, 2016.~~

~~Revenue Recognition:~~

~~In May 2014, the FASB issued ASU 2014-09, which superseded previously existing revenue recognition guidance. Under this ASU, companies~~certain amendments must apply a five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The ASU may be applied ~~using~~on a ~~full~~ retrospective ~~method or a modified retrospective transition method, with a cumulative-effect adjustment as of the date of adoption. The ASU also provides for~~basis, and certain practical expedients, including the option to expense as incurred the incremental costs of obtaining a contract, if the contract period is for one year or less. This ASU was effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU in the first quarter of 2018 using the full retrospective method and the practical expedient described above. Upon adoption, we made the following policy elections: (i) we account for shipping and handling costs as contract fulfillment costs, and (ii) we exclude taxes imposed on and collected from customers in revenue producing transactions (e.g., sales, use, and value added taxes) from the transaction price. The impact of adopting this guidance was immaterial to our financial statements and related disclosures.

~~Income Tax Impacts of Certain Intercompany Transfers:~~

In October 2016, the FASB issued ASU 2016-16 related to the income tax accounting impacts of intra-entity transfers of assets other than inventory, such as intellectual property and property, plant and equipment. Under the new accounting guidance, current and deferred income taxes shouldamendments must be recognized upon transfer of the assets. Previously, recognition of current and deferred income taxes was prohibited until the asset was sold to an external party. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this new guidanceapplied on a modified retrospective basis ~~through a cumulative-effect adjustment of $95 million to decrease retained earnings in the first quarter of 2018.~~

~~Definition of a Business Clarification:~~

In January 2017, the FASB issued ASU 2017-01 clarifying the definition of a business used in determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU provides a screen for companies to determine if an integrated set of assets and activities (“set”) is not a business. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If this screen is not met, the entity then determines if the set meets the minimum requirement of a business. For a set to be a business, it must include an input and a substantive process which together significantly contribute to the ability to create outputs. This ASU became effective beginning in the first quarter of our fiscal year 2018. We adopted this ASU on a prospective basis. The adoption of this ASU did not impact our financial statements or related disclosures.

~~Goodwill Impairment Test Simplification:~~

In January 2017, the FASB issued ASU 2017-04 related to goodwill impairment testing. This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, the entity will record an impairment loss based on that difference. The impairment loss will be limited to the amount of goodwill allocated to that reporting unit. Previously, if the fair value of a reporting unit was lower than its carrying amount (Step 1), an entity was required to calculate any impairment loss by comparing the implied fair value of goodwill with its carrying amount (Step 2). Additionally, under the new standard, companies that have reporting units with zero or negative carrying amounts will no longer be required to perform the qualitative assessment to determine whether to perform Step 2 of the goodwill impairment test. As a result, reporting units with zero or negative carrying amounts will generally be expected to pass the simplified impairment test; however, additional disclosure will be required of those companies. We early adopted this guidance on a prospective basis as of April 1, 2018 (our annual impairment testing date in the second quarter of 2018). As a result of adopting this ASU, we no longer perform Step 2 while completing our goodwill impairment testing, beginning with our annual goodwill impairment testing in the second quarter of 2018.

~~Accounting for Hedging Activities:~~

In August 2017, the FASB issued ASU 2017-12 related to accounting for hedging activities. This guidance impacted the accounting for financial (e.g., foreign exchange and interest rate) and non-financial (e.g., commodity) hedging activities. We early adopted this guidance on a modified retrospective basis in the third quarter of 2018. Upon adoption, we recognized an insignificant cumulative-effect adjustment to retained earnings/(deficit). The most significant impacts of adoption are that we now:

Recognize changes in the fair value of excluded components in net income/(loss) in the current period or in other comprehensive income/(loss) (and then amortize into net income/(loss) over the life of the hedging relationship);

Defer changes in the spot rate of the hedging instrument into other comprehensive income/(loss), while the excluded component (i.e., forward points or option premiums or discounts) is amortized into net income/(loss) over the life of the hedging relationship. When the excluded component is released or the forecasted transaction occurs, it is recognized in the same income statement line item affected by the hedged item; and

~~Present additional details in our tabular disclosures in the footnotes to the financial statements.~~

Additionally, ASU 2017-12 eliminated the requirement to separately measure and report hedge ineffectiveness; therefore, we removed disclosures related to hedge ineffectiveness. See our consolidated statements of other comprehensive income, Note 3, ~~Significant Accounting Policies, Note 14,~~ ~~Financial Instruments, and Note 15,~~ ~~Accumulated Other Comprehensive Income/(Losses), for updated disclosures pursuant to ASU 2017-12.~~

~~Accounting Standards Not Yet Adopted~~

~~Leases:~~

In February 2016, the FASB issued ASU 2016-02 to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The updated guidance requires lessees to reflect the majority of leases on their balance sheets as assets and obligations. This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. The guidance must be adopted using a modified retrospective transition method. The ASU also provides for certain practical expedients. Among the practical expedients is an optional transition method that allows companies to apply the guidance at the adoption date and recognize a cumulative-effect adjustment to retained earnings/(deficit) on the adoption date. We plan to elect this practical expedient upon adoption. We also plan to elect the package of practical expedients that will allow us to carry forward our determination of whether a lease exists, the classification of a lease, and whether initial direct lease costs exist for purposes of transition to the new standard. We do not expect to use the hindsight practical expedient. We do plan to elect the land easement option, which will allow us to continue to use prior accounting conclusions reached in our accounting for land easements. We also plan to elect the short-term lease exemption whereby we will not record an asset or liability for short-term leases. We have completed our scoping reviews, identified our significant leases by geography and by asset type, and developed our accounting policies and expected policy elections, which will take effect upon adoption of the standard. We have executed our lease data extraction strategy and completed data extraction efforts. Our identified accounting system, which will support the future state leasing process, is also ready for implementation. We have completed our future state process design as part of the overall system implementation. Upon adoption, we expect that our financial statement disclosures will be expanded to present additional details of our leasing arrangements. We expect this guidance to have a significant impact on our financial statements. We currently estimate that, upon adoption, we will have total lease assets between approximately $750 million and $910 million and total lease liabilities between approximately $810 million and $990 million. We will adopt this ASU on the first day of our fiscal year 2019.

~~Measurement of Current Expected Credit Losses:~~

In June 2016, the FASB issued ASU 2016-13 to update the methodology used to measure current expected credit losses (“CECL”). This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. This ASU ~~will be~~became effective ~~beginning~~ in the first quarter of ~~our fiscal year 2020. Early~~2021. The adoption ~~is permitted. We are currently evaluating the impact~~of this ASU ~~will have on~~did not impact our financial statements or the related disclosures.

Accounting Standards Not Yet Adopted

Accounting for Contract Assets and ~~related disclosures as well as the timing of adoption.~~Contract Liabilities from Contracts with Customers:

~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income:~~

In ~~February 2018,~~October 2021, the FASB issued ASU ~~2018-02 related~~2021-08 to ~~reclassifying tax effects stranded in accumulated other comprehensive income/(losses) because of~~amend the ~~Tax Cuts and Jobs Act (“U.S. Tax Reform”) enacted on December 22, 2017. U.S. Tax Reform reduced the U.S. federal corporate tax rate from 35.0% to 21.0%. ASC Topic 740,~~ ~~Income Taxes, requires the remeasurement of deferred tax~~accounting for contract assets and contract liabilities acquired in a business combination under ASC 805, Business Combinations. The guidance requires entities engaged in a business combination to recognize and measure contract assets acquired and contract liabilities assumed in accordance with ASC 606, Revenue from Contracts with Customers, rather than at fair value on the acquisition date. The amendments also apply to other contracts such as ~~a result~~contract liabilities arising from nonfinancial assets under ASC 610-20, Other Income – Gains and Losses from the Derecognition of such changes in tax laws or rates to be presented in net income/(loss) from continuing operations. However, the related tax effects of such deferred tax assets and liabilities may have been originally recorded in other comprehensive income/(loss)Nonfinancial Assets. This ASU allows companies to reclassify such stranded tax effects from accumulated other comprehensive income/(losses) to retained earnings/(deficit). This reclassification adjustment is optional, and if elected, may be applied either to the period of adoption or retrospectively to the period(s) impacted by U.S. Tax Reform. Additionally, this ASU requires companies to disclose the policy election for stranded tax effects as well as the general accounting policy for releasing income tax effects from accumulated other comprehensive income/(losses). ThisThe ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. We will adopt this ASU on the first day of our fiscal year 2019 and will make the policy election to reclassify stranded tax effects from accumulated other comprehensive income/(losses) to retained earnings/(deficit). We currently estimate the increase to retained earnings/(deficit) upon adoption will be between approximately $130 million and $140 million.

~~Fair Value Measurement Disclosures:~~

In August 2018, the FASB issued ASU 2018-13 related to fair value measurement disclosures. This ASU removes the requirement to disclose the amount of and reasons for transfers between Levels 1 and 2 of the fair value hierarchy, the policy for determining that a transfer has occurred, and valuation processes for Level 3 fair value measurements. Additionally, this ASU modifies the disclosures related to the measurement uncertainty for recurring Level 3 fair value measurements (by removing the requirement to disclose sensitivity to future changes) and the timing of liquidation of investee assets (by removing the timing requirement in certain instances). The guidance also requires new disclosures for Level 3 financial assets and liabilities, including the amount and location of unrealized gains and losses recognized in other comprehensive income/(loss) and additional information related to significant unobservable inputs used in determining Level 3 fair value measurements. This ASU will be effective beginning in the first quarter of our fiscal year 2020. Early adoption of the guidance in whole is permitted. Alternatively, companies may early adopt removed or modified disclosures and delay adoption of the additional disclosures until their effective date. Certain of the amendments in this ASU must be applied prospectively upon adoption, while other amendments must be applied retrospectively upon adoption. We elected to early adopt the provisions related to removing disclosures in the fourth quarter of our fiscal year 2018 on a retrospective basis. Accordingly, we have removed information related to our valuation process for Level 3 fair value measurements for pension plan investments within Note 13, ~~Postemployment Benefits. We also removed information about the amount of and reasons for transfers between Levels 1 and 2 of the fair value hierarchy from Note 14,~~ ~~Financial Instruments~~. There was no other impact to our financial statement disclosures as a result of early adopting the provisions related to removing disclosures. We are currently evaluating the disclosure impact of the provisions related to modifying and adding disclosures as well as the timing of adoption.

~~Disclosure Requirements for Certain Employer-Sponsored Benefit Plans:~~

In August 2018, the FASB issued ASU 2018-14 related to the disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans. The guidance requires sponsors of these plans to provide additional disclosures, including weighted-average interest rates used in the company’s cash balance plans and a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period. Additionally, this guidance eliminates certain previous disclosure requirements. This ASU will be effective beginning in the first quarter of our fiscal year 2020. Early adoption is permitted. This guidance must be applied on a retrospective basis to all periods presented. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures as well as the timing of adoption.

~~Implementation Costs Incurred in Hosted Cloud Computing Service Arrangements:~~

In August 2018, the FASB issued ASU 2018-15 related to accounting for implementation costs incurred in hosted cloud computing service arrangements. Under the new guidance, implementation costs incurred in a hosting arrangement that is a service contract should be expensed or capitalized based on the nature of the costs and the project stage during which such costs are incurred. If the implementation costs qualify for capitalization, they must be amortized over the term of the hosting arrangement and assessed for impairment. Companies must disclose the nature of any hosted cloud computing service arrangements. This ASU also provides guidance for balance sheet and income statement presentation of capitalized implementation costs and statement of cash flows presentation for the related payments. This ASU will be effective beginning in the first quarter of our fiscal year 2020.2023. Early adoption is permitted, including in an interim period. ~~This guidance may be adopted either retrospectively or prospectively~~We currently expect to ~~all implementation costs incurred after~~adopt ASU 2021-08 in the ~~date~~first quarter of ~~adoption. We are currently evaluating~~2023 on a prospective basis. While the impact of these amendments is dependent on the nature of any future transactions, we currently do not expect this ASU ~~will~~to have a significant impact on our financial statements and related ~~disclosures as well~~disclosures.

Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting:

In March 2020, the FASB issued ASU 2020-04 to provide temporary optional expedients and exceptions to the U.S. GAAP guidance for accounting for contracts, hedging relationships, and other transactions affected by the transition from discontinued reference rates, such as the ~~timing of adoption~~London Interbank Offered Rate (LIBOR), to alternative reference rates. The new accounting requirements can be applied from March 12, 2020 through December 31, 2022. While we currently do not expect this new guidance to have a significant impact on our financial statements or related disclosures, we continue to evaluate our contracts and the ~~application method.~~optional expedients provided by the new standard.

Note 5.4. Acquisitions and Divestitures

~~Cerebos Acquisition~~Acquisitions

Assan Foods Acquisition:

On ~~March 9, 2018~~October 1, 2021 (the ~~“Acquisition~~“Assan Foods Acquisition Date”), we acquired all of the outstanding equity interests in ~~Cerebos Pacific Limited~~Assan Gıda Sanayi ve Ticaret A.Ş. (“~~Cerebos”) (the “Cerebos Acquisition”~~Assan Foods”), ~~an Australian~~a condiments and sauces manufacturer based in Turkey, from third parties Kibar Holding Anonim Şirketi and a holder of registered shares of Assan Foods (the “Assan Foods Acquisition”).

The Assan Foods Acquisition was accounted for under the acquisition method of accounting for business combinations. Total consideration related to the Assan Foods Acquisition was approximately $79 million, including cash consideration of $70 million and contingent consideration of approximately $9 million. We utilized fair values at the Assan Foods Acquisition Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed. The purchase price allocation for the Assan Foods Acquisition is preliminary and subject to adjustment.

The fair value estimates of the assets acquired are subject to adjustment during the measurement period (up to one year from the Assan Foods Acquisition Date). The primary areas of accounting for the Assan Foods Acquisition that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired, residual goodwill, and any related tax impact. The fair values of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, we will evaluate any additional information prior to finalization of the fair value. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the Assan Foods Acquisition Date, that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings.

The preliminary purchase price allocation to assets acquired and liabilities assumed in the Assan Foods Acquisition was (in millions):


Cash	$	4
Trade receivables	24
Inventories	26
Other current assets	2
Property, plant and equipment, net	12

Other non-current assets	4
Short-term debt	(21)
Current portion of long-term debt	(5)
Trade payables	(25)
Other current liabilities	(2)
Long-term debt	(4)
Net assets acquired	15
Goodwill on acquisition	64
Total consideration	$	79

The Assan Foods Acquisition preliminarily resulted in $64 million of non tax deductible goodwill relating principally to additional capacity that the Assan Foods manufacturing facilities will provide for our brands in the EMEA East region. This goodwill was assigned to the EMEA East reporting unit within our International segment. See Note 9, Goodwill and Intangible Assets, for additional information.

We used carrying values as of the Assan Foods Acquisition Date to value certain current and non-current assets and liabilities, as we determined that they represented the fair value of those items at such date.

In the fourth quarter of 2021, we extinguished approximately $29 million of the short- and long-term debt assumed as a part of the Assan Foods Acquisition, resulting in approximately $1 million of long-term debt remaining related to the Assan Foods Acquisition at December 25, 2021. The loss on extinguishment related to the repayment of this debt was insignificant. Cash payments related to debt extinguishment are classified as cash outflows from financing activities on the consolidated statements of cash flows.

Just Spices Acquisition:

In December 2021, we entered into a definitive agreement with certain third-party shareholders of Just Spices GmbH (“Just Spices”) to acquire 85% of the shares of Just Spices (the “Just Spices Acquisition”). Just Spices is a German-based company focused on direct-to-consumer sales of premium spice blends. The Just Spices Acquisition closed in January 2022 for cash consideration of approximately 214 million euros (approximately $243 million at December 25, 2021). The initial accounting for the transaction is incomplete as of the date of this Annual Report on Form 10-K, as the information necessary to complete such evaluation is in the process of being obtained and more thoroughly evaluated. We have not yet determined the purchase price allocation, including the fair value of the acquired assets and assumed liabilities.

Hemmer Acquisition:

In September 2021, we entered into a definitive agreement with certain third-party shareholders of Companhia Hemmer Indústria e Comércio (“Hemmer”) to acquire a majority of the outstanding equity interests of Hemmer for cash consideration of approximately 1.2 billion Brazilian reais (approximately $211 million at December 25, 2021) (the “Hemmer Acquisition”). Hemmer is a Brazilian food and beverage manufacturing company ~~with several local brands~~focused on the condiments and sauces category. The Hemmer Acquisition is expected to close in ~~Australia and New Zealand. The Cerebos business manufactures, markets, and sells food and beverage products,~~the first half of 2022, subject to customary closing conditions, including ~~gravies, sauces, instant coffee, salt, herbs and spices, and tea. Cerebos is included in our consolidated financial statements as~~regulatory approvals.

Primal Acquisition:

On January 3, 2019 (the “Primal Acquisition Date”), we acquired 100% of the ~~Acquisition Date. We have not included unaudited pro forma results, prepared~~outstanding equity interests in ~~accordance~~Primal Nutrition, LLC (“Primal Nutrition”) (the “Primal Acquisition”), a better-for-you brand primarily focused on condiments, sauces, and dressings, with ~~ASC 805, as if Cerebos had been acquired as of January 1, 2018, as it would not yield significantly different results.~~growing product lines in healthy snacks and other categories. The Primal Kitchen brand holds leading positions in the e-commerce and natural channels.

The ~~Cerebos~~Primal Acquisition was accounted for under the acquisition method of accounting for business combinations. The total cash consideration paid for ~~Cerebos~~Primal Nutrition was ~~$244~~$201 million. We utilized estimated fair values at the Primal Acquisition Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed. Such allocation for the Primal Acquisition was final as of ~~December 29, 2018.~~September 28, 2019.

The final purchase price allocation to assets acquired and liabilities assumed in the ~~Cerebos~~Primal Acquisition was (in millions):


Cash	$	2
Other current assets	15
Identifiable intangible assets	66
Current liabilities	(6)
Net assets acquired	77
Goodwill on acquisition	124
Total consideration	$	201

Cash $ 23
Other current assets 65
Property, plant and equipment, net 75
Identifiable intangible assets 100
Trade and other payables (41 )
Other non-current liabilities (3 )
Net assets acquired 219
Goodwill on acquisition 25
Total consideration $ 244

The ~~Cerebos~~Primal Acquisition resulted in ~~$25~~$124 million of ~~non~~ tax deductible goodwill relating principally to planned expansion of ~~Cerebos brands~~the PrimalKitchen brand into new ~~categories~~channels and ~~markets.~~categories. This goodwill was allocated to ~~Rest of World as shown in Note 10,~~ ~~Goodwill and Intangible Assets~~.the United States segment.

The ~~final~~ purchase price allocation to identifiable intangible assets acquired in the ~~Cerebos~~Primal Acquisition was:


	Fair Value (in millions of dollars)		Weighted Average Life (in years)		Fair Value (in millions of dollars)		Weighted Average Life (in years)
Definite-lived trademarks	$	87	22	Definite-lived trademarks	$	52.5	15
Customer-related assets	13		12	Customer-related assets	13.5		20
Total	$	100		Total	$	66.0

We valued trademarks using the relief from royalty method and customer-related assets using the distributor method. Some of the more significant assumptions inherent in developing the valuations included the estimated annual net cash flows for each definite-lived intangible asset (including net sales, cost of products sold, selling and marketing costs, and working capital/contributory asset charges), the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors. We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, ~~management~~management’s plans, and market comparables.

We used carrying values as of the Primal Acquisition Date to value ~~trade receivables and payables, as well as~~ certain ~~other~~ current and non-current assets and liabilities, as we determined that they represented the fair value of those items at the Primal Acquisition Date.

~~We valued finished goods and work-in-process inventory using a net realizable value approach. Raw materials and packaging inventory was valued using the replacement cost approach.~~

We valued property, plant and equipment using a combination of the income approach, the market approach, and the cost approach, which is based on the current replacement and/or reproduction cost of the asset as new, less depreciation attributable to physical, functional, and economic factors.

~~We incurred deal costs of $18 million in 2018 related to the Cerebos Acquisition.~~

Other ~~Acquisitions~~Acquisitions:

In the ~~third~~fourth quarter of ~~2018,~~2021, we ~~had two additional acquisitions of businesses, including The Ethical Bean Coffee Company Ltd.~~acquired a majority stake in BR Spices Indústria e Comércio de Alimentos Ltda. (“BR Spices”), a ~~Canadian-based coffee roaster,~~manufacturer of spices and ~~Wellio, Inc., a full-service meal planning~~other seasonings in Brazil, for an insignificant amount of cash consideration (the “BR Spices Acquisition”). At December 25, 2021, redeemable noncontrolling interest on our consolidated balance sheet relates to BR Spices.

Deal Costs:

Related to our acquisitions, we incurred insignificant deal costs in 2021 and ~~preparation technology start-up~~2019. We recognized these deal costs in ~~the U.S. The aggregate consideration paid~~SG&A. There were no deal costs related to ~~these~~ acquisitions ~~was $27 million.~~in 2020.

Divestitures

Cheese Transaction:

In ~~November 2018,~~September 2020, we entered into a definitive agreement with a third party, an affiliate of Groupe Lactalis (“Lactalis”), to ~~acquire all~~sell certain assets in our global cheese business, as well as to license certain trademarks, for total consideration of approximately $3.34 billion, including approximately $3.20 billion of cash consideration and approximately $141 million related to a perpetual license for the Cracker Barrel brand that Lactalis granted to us for certain products (the “Cheese Transaction”). The Cheese Transaction closed on November 29, 2021 (the “Cheese Transaction Closing Date”) and had 2 primary components. The first component related to the perpetual licenses for the Kraft and Velveeta brands that we granted to Lactalis for certain cheese products (the “Kraft and Velveeta Licenses”), along with a three-year transitional license that we granted to Lactalis for the Philadelphia brand (the “Philadelphia License” and collectively, the “Cheese Divestiture Licenses”). The second component related to the net assets transferred to Lactalis (the “Cheese Disposal Group”).

Of the $3.34 billion total consideration, approximately $1.59 billion was attributed to the Cheese Divestiture Licenses based on the estimated fair value of the ~~outstanding equity interests~~licensed portion of each brand. Lactalis received the rights to the Kraft and Velveeta brands in ~~Primal Nutrition, LLC (“Primal Nutrition”) for~~association with the manufacturing, distribution, marketing, and sale of certain cheese products in certain countries. Lactalis also received the rights to certain know-how in manufacturing the authorized cheese products. Additionally, Lactalis received the rights to use the Philadelphia brand logo on certain Kraft shredded cheese products as the sale of such products are wound down. As of the Cheese Transaction Closing Date, the license income is recognized as a reduction to SG&A, as it does not constitute our ongoing major or central operations. The license income related to the Kraft and Velveeta Licenses will be recognized over approximately ~~$200~~30 years. The license income related to the Philadelphia License will be recognized over approximately three years. In 2021, we recognized an insignificant amount of license income related to the Cheese Divestiture Licenses. On an annual basis, we expect to recognize license income of approximately $55 million ~~(the “Primal Acquisition”). Primal Nutrition is a better-for-you brand primarily focused on condiments, sauces, and dressings, with growing product lines in healthy snacks and other categories.~~ related to the Cheese Divestiture Licenses, which will be classified as divestiture-related license income.

The ~~brand holds leading positions~~remaining $1.75 billion of consideration was attributed to the Cheese Disposal Group. The net assets in the ~~e-commerce~~Cheese Disposal Group were associated with our natural, grated, cultured, and specialty cheese businesses in the U.S., our grated cheese business in Canada, and our grated, processed, and natural ~~channels.~~cheese businesses outside the U.S. and Canada. The ~~Primal Acquisition closed~~Cheese Disposal Group included our global intellectual property rights to several brands, including, among others, Cracker Barrel, Breakstone’s, Knudsen, Athenos, Polly-O, and Hoffman’s, along with the Cheez Whiz brand in the majority of the countries outside of the U.S. and Canada. The Cheese Disposal Group also included certain inventories, 3 manufacturing facilities and 1 distribution center in the U.S., and certain other manufacturing equipment.

Included in the consideration attributed to the Cheese Disposal Group was the perpetual license that Lactalis granted to us for the Cracker Barrel brand for certain products, including macaroni and cheese. Following the closing of the Cheese Transaction, we recognized the Cracker Barrel license as a definite-lived intangible asset on ~~January 3, 2019.~~

~~We incurred aggregate deal costs related to other acquisitions~~our consolidated balance sheet, which will be amortized over 30 years. The total consideration for the Cheese Transaction included approximately $141 million, as noted above, which was the estimated fair value of ~~$2 million in 2018.~~

~~Divestitures~~the licensed portion of the Cracker Barrel brand as of the Cheese Transaction Closing Date.

In ~~May 2018,~~the third quarter of 2020, we ~~sold our 50.1% interest in our South African subsidiary to our minority interest partner. The transaction included proceeds~~determined that the Cheese Disposal Group met the held for sale criteria. Accordingly, we presented the assets and liabilities of ~~$18 million, which are included in other investing activities, net~~the Cheese Disposal Group as held for sale on the consolidated ~~statement~~balance sheet at December 26, 2020. As of ~~cash flows~~September 15, 2020, the date the Cheese Disposal Group was determined to be held for ~~2018.~~sale, we tested the individual assets included within the Cheese Disposal Group for impairment. The net assets of the Cheese Disposal Group had an aggregate carrying amount above their then-current $1.78 billion estimated fair value. We determined that the goodwill within the Cheese Disposal Group was partially impaired. Accordingly, we recorded a non-cash impairment loss of $300 million, which was recognized in SG&A, in the third quarter of 2020.

In the second quarter of 2021, we assessed the fair value less costs to sell of the net assets of the Cheese Disposal Group and recorded an estimated pre-tax loss on sale of business of approximately ~~$15 million.~~ $27 million, which was recognized in other expense/(income).

Following the closing of the Cheese Transaction in the fourth quarter of 2021, we recognized an incremental pre-tax gain on sale of business of $27 million in other expense/(income). In 2021, the total gain/loss on sale of business related to the Cheese Transaction was insignificant. Additional considerations related to the Cheese Transaction included the treatment of the Cheese Divestiture Licenses upon closing of the transaction. In the fourth quarter of 2021, at the time the licensed rights were granted, we reassessed the remaining fair value of the retained portions of the Kraft and Velveeta brands and recorded a non-cash intangible asset impairment loss related to the Kraft brand of approximately $1.24 billion, which was recognized in SG&A. See Note 9, Goodwill and Intangible Assets, for additional information.

We utilized the excess earnings method under the income approach to estimate the fair value of the licensed portion of the Kraft brand and the relief from royalty method under the income approach to estimate the fair value of the licensed portions of the Velveeta brand and the Cracker Barrel brand. Some of the more significant assumptions inherent in estimating these fair values include the estimated future annual net sales and net cash flows for each brand, contributory asset charges, royalty rates (as a percentage of net sales that would hypothetically be charged by a licensor of the brand to an unrelated licensee), income tax considerations, long-term growth rates, and a discount rate that reflects the level of risk associated with the future earnings attributable to each brand. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, and guideline companies. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. See Note 9, Goodwill and Intangible Assets, for additional information on the underlying assumptions and sensitivities.

The Cheese Transaction is not considered a strategic shift that will have a major effect on our operations or financial results; therefore, it was not reported as discontinued operations.

Nuts Transaction:

In February 2021, we entered into a definitive agreement with a third party, Hormel Foods Corporation (“Hormel”), to sell certain assets in our global nuts business for total consideration of approximately $3.4 billion (the “Nuts Transaction”). The net assets transferred in the Nuts Transaction included, among other things, our intellectual property rights to the Planters brand and to the Corn Nuts brand, 3 manufacturing facilities in the U.S., and the associated inventories (collectively, the “Nuts Disposal Group”).

As of February 10, 2021, the date the Nuts Disposal Group was determined to be held for sale, we tested the individual assets included within the Nuts Disposal Group for impairment. The net assets of the Nuts Disposal Group had an aggregate carrying amount above their $3.4 billion estimated fair value. We determined that the goodwill within the Nuts Disposal Group was partially impaired. As a result, we recorded a non-cash goodwill impairment loss of $230 million, which was recognized in SG&A, in the first quarter of 2021. Additionally, we recorded an estimated pre-tax loss on sale of business of $19 million in the first quarter of 2021 primarily related to estimated costs to sell, which was recognized in other expense/(income).

The Nuts Transaction closed in the second quarter of 2021. As a result of the Nuts Transaction closing, we recognized an incremental pre-tax loss on sale of business of $17 million in other expense/(income) in the second quarter of 2021. In the third and fourth quarters of 2021, we recorded insignificant adjustments to our estimated costs to sell, which resulted in an insignificant pre-tax gain on sale of business that was recognized in other expense/(income). In 2021, the total pre-tax loss on sale of business for the Nuts Transaction was $34 million, all of which was recognized in other expense/(income) on our consolidated statement of income.

The Nuts Transaction is not considered a strategic shift that will have a major effect on our operations or financial results; therefore, it was not reported as discontinued operations.

Other Potential Dispositions:

In the fourth quarter of 2019, we determined a business in our International segment was held for sale and recorded an estimated pre-tax loss on sale of business of $71 million within other expense/(income). In the third quarter of 2021, we exhausted negotiations with our most recently identified buyer for this business. As of September 25, 2021, we determined that the related disposal group no longer met the held for sale criteria as there was no longer an active plan to sell and the sale was not probable within the next year. Accordingly, we reclassified the disposal group as held and used and remeasured the disposal group, which resulted in a $75 million pre-tax gain recorded in other expense/(income) in the third quarter of 2021. Consistent with the presentation of the pre-tax loss recorded in the fourth quarter of 2019, this gain was included in ~~SG&A~~loss/(gain) on ~~the~~sale of business within other expense/(income) on our consolidated statement of ~~income~~income. The difference between the initial loss on sale of business and the gain resulting from remeasurement of the disposal group was due to foreign currency fluctuations.

In the first quarter of 2020, we had deemed a separate business in our International segment held for ~~2018.~~sale and recorded an estimated pre-tax loss on sale of business of $3 million within other expense/(income). In the fourth quarter of 2020, we deemed this business no longer held for sale and reversed the corresponding pre-tax loss. The related assets and liabilities were no longer classified as held for sale on our consolidated balance sheet at December 26, 2020.

Heinz India Transaction:

In October 2018, we entered into a definitive agreement with 2 third-parties, Zydus Wellness Limited and Cadila Healthcare Limited (collectively, the “Buyers”), to sell 100% of our equity interests in Heinz India Private Limited (“Heinz India”) for approximately 46 billion Indian rupees (approximately ~~$660~~$655 million at ~~December 29, 2018)~~the Heinz India Closing Date (defined below)) (the “Heinz India Transaction”). In connection with the Heinz India Transaction, we ~~will transfer~~transferred to the Buyers, among other assets and operations, our global intellectual property rights to several brands, including Complan, Glucon-D, Nycil, and Sampriti. Our core brands (i.e., Heinz and Kraft) ~~will~~were not be transferred. The Heinz India Transaction closed on January 30, ~~2019. We expect~~2019 (the “Heinz India Closing Date”). Related to ~~recognize~~the Heinz India Transaction, we recognized a pre-tax gain on ~~this~~sale of business in other expense/(income) of $249 million in 2019.

The components of the pre-tax gain recognized in 2019 were as follows (in millions):


Proceeds	$	655
Less investment in Heinz India	(355)
Recognition of tax indemnification	(48)
Other	(3)
Pre-tax gain on sale of Heinz India	$	249

In connection with the Heinz India Transaction, we agreed to indemnify the Buyers from and against any tax losses for any taxable period prior to the Heinz India Closing Date, including taxes for which we are liable as a result of any transaction ~~upon closing.~~that occurred on or before such date. To determine the fair value of our tax indemnity we made various assumptions, including the range of potential dates the tax matters will be resolved, the range of potential future cash flows, the probabilities associated with potential resolution dates and potential future cash flows, and the discount rate. We ~~have presented the assets and~~recorded tax indemnity liabilities related to the Heinz India Transaction ~~as held for sale~~totaling approximately $48 million, including $18 million in other current liabilities and $30 million in other non-current liabilities on ~~the~~our consolidated balance sheet ~~at December 29, 2018. This divestiture is not considered a strategic shift that will have a major effect on our operations or financial results; therefore, it will not be reported~~ as ~~discontinued operations.~~

~~We entered into foreign exchange derivative contracts to economically hedge the foreign currency exposure related to~~of the Heinz India Closing Date. We also recorded a corresponding $48 million reduction of the pre-tax gain on the Heinz India Transaction within other expense/(income) in our consolidated statement of income in the first quarter of 2019. Future changes to the fair value of these tax indemnity liabilities will continue to impact other expense/(income) throughout the life of the exposures as a component of the gain on sale of business for the Heinz India Transaction. ~~Additionally, we entered into foreign exchange derivative contracts, which are designated as~~

The other component of the pre-tax gain on the sale of Heinz India in the table above primarily related to losses on net investment hedges ~~related to~~of our investment in Heinz ~~India. See Note 14,~~ ~~Financial Instruments, for additional information. We also recorded changes~~India, which were settled in ~~our deferred~~the first quarter of 2019, and were partially offset by a local India tax ~~liabilities~~recovery in the third quarter of 2019.

In 2020, we recognized an insignificant pre-tax loss on sale of business primarily related to certain adjustments to the ~~Heinz India Transaction. See Note 11,~~ ~~Income Taxes, for additional information.~~tax indemnity liabilities. In 2021, we recognized an insignificant pre-tax gain on sale of business related to certain adjustments to the tax indemnity liabilities. These pre-tax losses/(gains) on sale of business were recognized within other expense/(income) on our consolidated statement of income.

~~Additionally, in~~Canada Natural Cheese Transaction:

In November 2018, we entered into a definitive agreement with a third-party, Parmalat SpA (“Parmalat”), to sell certain assets in our natural cheese ~~portfolio~~business in Canada for approximately 1.6 billion Canadian dollars (approximately $1.2 billion at ~~December 29, 2018)~~the Canada Natural Cheese Closing Date (defined below)) (the “Canada Natural Cheese Transaction”). In connection with the Canada Natural Cheese Transaction, we ~~will transfer~~transferred certain assets to Parmalat, including the intellectual property rights to Cracker Barrel in Canada and P’Tit Quebec globally. ~~While this transaction is contingent on customary closing conditions, we expect the~~The Canada Natural Cheese Transaction ~~to be finalized in mid-2019. We expect to recognize a gain~~closed on ~~this transaction upon closing. We have presented the assets and liabilities related~~July 2, 2019 (the “Canada Natural Cheese Closing Date”). Related to the Canada Natural Cheese Transaction, we recognized a pre-tax gain of $242 million, which was included in other expense/(income) in 2019.

The components of the pre-tax gain were as ~~held~~follows (in millions):


Proceeds	$	1,236
Less carrying value of Canada Natural Cheese net assets	(995)
Other	1
Pre-tax gain resulting from Canada Natural Cheese Transaction	$	242

Deal Costs:

Related to our divestitures, we incurred insignificant deal costs in 2021 and 2020. We incurred deal costs of $17 million in 2019. We recognized these deal costs in SG&A.

Held for sale on the consolidated balance sheet at December 29, 2018. This divestiture is not considered a strategic shift that will have a major effect on our operations or financial results; therefore, it will not be reported as discontinued operations.Sale

Our assets and liabilities held for sale, by major class, were (in millions):


	December 25, 2021		December 26, 2020
ASSETS
Cash and cash equivalents	$	—	$	33
Inventories	5		385
Property, plant and equipment, net	5		257
Goodwill (net of impairment of $300 at December 26, 2020)	—		281
Intangible assets, net	1		873
Other	—		34

Total assets held for sale	$	11	$	1,863
LIABILITIES
Other	—		17
Total liabilities held for sale	$	—	$	17

December 29, 2018
ASSETS
Inventories $ 92
Property, plant and equipment, net 139
Goodwill 669
Intangible assets, net 437
Other 39
Total assets held for sale $ 1,376
LIABILITIES
Trade payables $ 16
Other 39
Total liabilities held for sale $ 55

~~We incurred aggregate deal costs~~The balances held for sale at December 25, 2021 included inventory in our International segment related to ~~these divestitures~~the Cheese Transaction and certain manufacturing equipment and land use rights across the globe. The balances held for sale at December 26, 2020 primarily related to the Cheese Transaction, a business in our International segment, and certain manufacturing equipment and land use rights across the globe. We recorded non-cash goodwill impairment losses of $3$300 million in ~~2018.~~

the third quarter of 2020 related to the Cheese Transaction. As a result, goodwill held for sale in the table above is presented net of cumulative goodwill impairment losses of $300 million at December 26, 2020.

Note ~~6. Integration and~~5. Restructuring ~~Expenses~~Activities

As part of our restructuring activities, we incur expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs and other exit costs. Severance and employee benefit costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense, and pension and other termination benefits. Other exit costs primarily relate to lease and contract terminations. We also incur expenses that are an integral component of, and directly attributable to, our restructuring activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include asset-related costs and other implementation costs. Asset-related costs primarily relate to accelerated depreciation and asset impairment charges. Other implementation costs primarily relate to start-up costs of new facilities, professional fees, asset relocation costs, costs to exit facilities, and costs associated with restructuring benefit plans.

Employee severance and other termination benefit packages are primarily determined based on established benefit arrangements, local statutory requirements, orand historical benefit practices. We recognize the contractual component of these benefits when payment is probable and estimable; additional elements of severance and termination benefits associated with non-recurring benefits are recognized ratably over each employee’s required future service period. Charges for accelerated depreciation are recognized on long-lived assets that will be taken out of service before the end of their normal service, in which case depreciation estimates are revised to reflect the use of the asset over its shortened useful life. Asset impairments establish a new fair value basis for assets held for disposal or sale, and those assets are written down to expected net realizable value if carrying value exceeds fair value. All other costs are recognized as incurred.

~~Integration Program:~~

At the end of 2017, we had substantially completed our multi-year program announced following the 2015 Merger (the “Integration Program”), which was designed to reduce costs and integrate and optimize our combined organization, primarily in the U.S. and Canada segments. Overall, as part of the Integration Program, we closed net six factories, consolidated our distribution network, and eliminated 4,900 positions. Approximately 65% of total Integration Program costs were reflected in cost of products sold, and approximately 60% were cash expenditures.

As of December 29, 2018, we had incurred cumulative pre-tax costs of $2,146 million, including $92 million in 2018, $316 million in 2017, and $887 million in 2016. The $2,146 million of cumulative pre-tax costs included $541 million of severance and employee benefit costs, $889 million of non-cash asset-related costs, $609 million of other implementation costs, and $107 million of other exit costs. The related amounts incurred in 2018 were $2 million of severance and employee benefit costs, $32 million of non-cash asset-related costs, $59 million of other implementation costs, and $1 million of credits in other exit costs.

~~Our cumulative pre-tax costs related to the Integration Program, as well as the associated costs for the year ended December 30, 2017, reflect the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.

~~As of December 29, 2018, we do not expect to incur significant additional expenses related to the Integration Program.~~

~~Our liability balance for Integration Program costs that qualify as exit and disposal costs under U.S. GAAP (i.e., severance and employee benefit costs and other exit costs) was (in millions):~~

Severance and Employee Benefit Costs
Other Exit Costs^(a)
Total
Balance at December 30, 2017 $ 24
$ 22
$ 46
Charges/(credits) 2
(1 ) 1
Cash payments (12 ) (2 ) (14 )
Non-cash utilization (9 ) (19 ) (28 )
Balance at December 29, 2018 $ 5
$ —
$ 5

~~(a) Other exit costs primarily consist of lease and contract terminations.~~

~~The Integration Program liability at December 29, 2018 relates to the elimination of salaried positions in Canada. We expect the majority of this liability to be paid by the end of 2019.~~

Restructuring Activities:

~~In addition to our Integration Program in North America, we~~We have ~~other~~ restructuring programs globally, which are focused primarily on workforce reduction and factory closure and ~~consolidation, and benefit plan restructuring. Related~~consolidation. In 2021, we eliminated approximately 430 positions related to these ~~programs,~~programs. As of December 25, 2021, we expect to eliminate approximately ~~1,900~~750 additional positions ~~1,400~~in 2022, primarily outside of ~~which were eliminated in 2018. These programs~~the United States and Canada. In 2021, restructuring activities resulted in expenses of ~~$368~~$84 million ~~in 2018, including $48~~and included $34 million of severance and employee benefit costs ~~$63 million of non-cash asset-related costs, $251~~and $50 million of other implementation ~~costs, and $6 million~~costs. Restructuring activities resulted in income of other exit costs. Other implementation costs included a non-cash settlement charge related to the settlement of our Canadian salaried and Canadian hourly defined benefit pension plans in 2018. See Note 13, ~~Postemployment Benefit Plans, for additional information. Other restructuring program expenses totaled $118~~$2 million in ~~2017~~2020 and ~~$125~~expenses of $108 million in ~~2016.~~2019.

Our net liability balance for restructuring project costs that qualify as exit and disposal costs under U.S. GAAP ~~(i.e., severance and employee benefit costs and other exit costs)~~ was (in millions):

Severance and Employee Benefit Costs
Other Exit Costs^(a)
Total
Balance at December 30, 2017 $ 16
$ 25
$ 41
Charges/(credits) 48
6
54
Cash payments (35 ) (12 ) (47 )
Non-cash utilization 3
14
17
Balance at December 29, 2018 $ 32
$ 33
$ 65

~~(a) Other exit costs primarily consist of lease and contract terminations.~~


	Severance and Employee Benefit Costs		Other Exit Costs		Total
Balance at December 26, 2020	$	10	$	20	$	30
Charges/(credits)	34		—		34
Cash payments	(17)		(4)		(21)
Balance at December 25, 2021	$	27	$	16	$	43

We expect the majority of the liability for severance and employee benefit costs as of December ~~29, 2018~~25, 2021 to be paid by the end of ~~2019.~~2022. The liability for other exit costs primarily relates to lease obligations. The cash impact of these obligations will continue for the duration of the lease terms, which expire between ~~2019~~2022 and 2026.

Total ~~Integration and Restructuring:~~Expenses/(Income):

Total expense/(income) related to ~~the Integration Program and~~ restructuring activities by income statement caption, were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Severance and employee benefit costs - Cost of products sold	$	12	$	—	$	(3)
Severance and employee benefit costs - SG&A	21		1		14
Severance and employee benefit costs - Other expense/(income)	1		—		4
Asset-related costs - Cost of products sold	—		13		29
Asset-related costs - SG&A	—		—		8
Other costs - Cost of products sold	1		(33)		22
Other costs - SG&A	49		34		32
Other costs - Other expense/(income)	—		(17)		2
	$	84	$	(2)	$	108

As Restated & Recast As Recast
December 29,
2018 December 30,
2017 December 31,
2016
Severance and employee benefit costs - COGS $ 12
$ 9
$ 41
Severance and employee benefit costs - SG&A 32
26
96
Severance and employee benefit costs - Other expense/(income), net 6
(149 ) 20
Asset-related costs - COGS 59
191
496
Asset-related costs - SG&A 36
26
41
Other costs - COGS 123
264
162
Other costs - SG&A 35
67
156
Other costs - Other expense/(income), net 157
—
—
$ 460
$ 434
$ 1,012

~~Total expense/(income) for the year ended December 30, 2017 reflects the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.

We do not include ~~Integration Program and~~our restructuring ~~expenses~~activities within Segment Adjusted EBITDA (as defined in Note ~~22,~~ 21, Segment Reporting). The pre-tax impact of allocating such expenses to our segments would have been (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
United States	$	9	$	(10)	$	37
International	22		(15)		29
Canada	6		14		18
General corporate expenses	47		9		24
	$	84	$	(2)	$	108

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
United States $ 205
$ 270
$ 759
Canada 176
34
45
EMEA 16
56
85
Rest of World 25
13
6
General corporate expenses 38
61
117
$ 460
$ 434
$ 1,012

In the first quarter of 2018, we reorganized our segment structure to move our Middle East and Africa businesses from the Rest of World segment to the EMEA reportable segment. We have reflected this change in all historical periods presented. This change did not have a material impact on our current or any prior period results. See Note 22, ~~Segment Reporting, for additional information.~~

~~In addition, total expense/(income) for the year ended December 30, 2017 reflects the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.

Note 7.6. Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, as reported on our consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our consolidated statements of cash flows (in millions):


	December 25, 2021		December 26, 2020
Cash and cash equivalents	$	3,445	$	3,417

Restricted cash included in other non-current assets	1		1
Cash, cash equivalents, and restricted cash	$	3,446	$	3,418

At December 26, 2020, cash and cash equivalents excluded amounts classified as held for sale. See Note 4, Acquisitions and Divestitures, for additional information.

December 29,
2018 December 30, 2017
Cash and cash equivalents $ 1,130
$ 1,629
Restricted cash included in other current assets 1
140
Restricted cash included in other non-current assets 5
—
Cash, cash equivalents, and restricted cash $ 1,136
$ 1,769

~~Our restricted cash at December 30, 2017 primarily related to withholding taxes on our common stock dividends to our only significant international shareholder, 3G Capital.~~

Note 8.7. Inventories

Inventories consisted of the following (in millions):


	December 25, 2021		December 26, 2020
Packaging and ingredients	$	571	$	482
Spare parts	208		219
Work in process	268		268
Finished product	1,682		1,804
Inventories	$	2,729	$	2,773

As Restated
December 29, 2018 December 30, 2017
Packaging and ingredients $ 510
$ 560
Work in process 343
384
Finished product 1,814
1,816
Inventories $ 2,667
$ 2,760

At December ~~29, 2018,~~25, 2021 and December 26, 2020, inventories excluded amounts classified as held for sale. See Note 5, 4, Acquisitions and Divestitures, for additional information. ~~Additionally,~~

In the first quarter of 2021, we reclassified certain balances from prepaid expenses to inventories ~~at December 30, 2017 reflect the restatements described in~~on our consolidated balance sheets. See Note 2, ~~Restatement~~1, Basis of ~~Previously Issued Consolidated Financial Statements~~.

Presentation, for additional information.

Note 9.8. Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in millions):


	December 25, 2021		December 26, 2020
Land	$	207	$	219
Buildings and improvements	2,508		2,514
Equipment and other	6,957		6,914
Construction in progress	1,002		792
	10,674		10,439
Accumulated depreciation	(3,868)		(3,563)
Property, plant and equipment, net	$	6,806	$	6,876

As Restated
December 29, 2018 December 30,
2017
Land $ 218
$ 250
Buildings and improvements 2,375
2,232
Equipment and other 5,904
5,323
Construction in progress 1,165
1,345
9,662
9,150
Accumulated depreciation (2,584 ) (2,089 )
Property, plant and equipment, net $ 7,078
$ 7,061

At December ~~29, 2018,~~25, 2021 and December 26, 2020, property, plant and equipment, net, excluded amounts classified as held for sale. See Note 5, 4, Acquisitions and Divestitures, for additional information. ~~Additionally, property, plant~~Depreciation expense was $671 million in 2021, $705 million in 2020, and ~~equipment balances at December 30, 2017 reflect the restatements described~~$708 million in ~~Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.2019.

Note ~~10.~~9. Goodwill and Intangible Assets

Goodwill:

Changes in the carrying amount of goodwill, by segment, were (in millions):


	United States		International		Canada		Total
Balance at December 26, 2020	$	28,429	$	3,160	$	1,500	$	33,089
Impairment losses	(35)		(53)		—		(88)
Acquisitions	—		74		—		74
Divestitures	(1,653)		—		(9)		(1,662)

Translation adjustments and other	4		(127)		6		(117)
Balance at December 25, 2021	$	26,745	$	3,054	$	1,497	$	31,296

United States Canada EMEA Rest of World Total
Balance at December 30, 2017 (As Restated) $ 33,701
$ 5,246
$ 3,238
$ 2,640
$ 44,825
Impairment losses (4,104 ) (1,947 ) —
(957 ) (7,008 )
Reclassified to assets held for sale —
(496 ) —
(173 ) (669 )
Acquisitions —
16
—
25
41
Translation adjustments and other —
(381 ) (164 ) (141 ) (686 )
Balance at December 29, 2018 $ 29,597
$ 2,438
$ 3,074
$ 1,394
$ 36,503

~~Goodwill at~~At December ~~30, 2017 reflects~~26, 2020, goodwill excluded amounts classified as held for sale related to the ~~restatements described~~Cheese Transaction, which closed in ~~Note 2,~~ ~~Restatement~~the fourth quarter of ~~Previously Issued Consolidated Financial Statements~~.

In2021. Additionally, the amounts included in divestitures in the table above represent the goodwill that was previously reclassified to assets held for sale and tested and determined to be partially impaired in connection with the Nuts Transaction. The resulting impairment loss of $230 million was recognized in the first quarter of ~~2018, we reorganized our segment structure to move our Middle East and Africa businesses from~~2021. The Nuts Transaction closed in the ~~Rest~~second quarter of World segment to the EMEA reportable segment. We have reflected this change in all historical periods presented. Accordingly, the segment goodwill balances at December 30, 2017 reflect an increase of $179 million in EMEA and a corresponding decrease in Rest of World. This change did not have a material impact on our current or any prior period results.2021. See Note ~~22,~~ ~~Segment Reporting, for additional information.~~

~~See Note 5,~~ 4, Acquisitions and Divestitures, for additional information related to ~~our acquisitions in 2018, as well as~~the Cheese Transaction and the Nuts Transaction and their financial statement impacts.

2021 Goodwill Impairment Testing

In the first quarter of 2021, we announced the Nuts Transaction and determined that the Nuts Disposal Group was held for sale. Accordingly, based on a relative fair value allocation, we reclassified $1.7 billion of goodwill to assets held for sale, ~~at December 29, 2018~~which included a portion of goodwill from 4 of our reporting units. The Nuts Transaction primarily affected our Kids, Snacks, and Beverages (“KSB”) reporting unit but also affected, to a lesser extent, our Enhancers, Specialty, and Away From Home (“ESA”), Canada Foodservice, and Puerto Rico reporting units. These reporting units were evaluated for impairment prior to their representative inclusion in the Nuts Disposal Group as well as on a post-reclassification basis. The fair value of all reporting units was determined to be in excess of their carrying amounts in both scenarios and, therefore, no impairment was recorded.

We test our reporting units for impairment annually as of the first day of our second quarter, which was March 28, 2021 for our 2021 annual impairment test. In performing this test, we incorporated information that was known through the date of filing of our Quarterly Report on Form 10-Q for the period ended June 26, 2021. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our 2021 annual impairment test, we recognized a non-cash impairment loss of approximately $35 million in SG&A in the second quarter of 2021 related to our Puerto Rico reporting unit within our United States segment. With the update of our five-year operating plan in the second quarter of 2021, we established a revised downward outlook for net sales for this reporting unit. After the impairment, the goodwill carrying amount of the Puerto Rico reporting unit is approximately $14 million.

In the fourth quarter of 2021, we completed the Assan Foods Acquisition and the BR Spices Acquisition, both in our International segment. We assigned the goodwill related to the ~~Canada Natural Cheese Transaction~~Assan Foods Acquisition to our EMEA East reporting unit and the ~~Heinz India Transaction.~~

~~Our~~ goodwill ~~balance consists of 20~~related to the BR Spices Acquisition to our Latin America (“LATAM”) reporting unit. Prior to these acquisitions, the EMEA East and LATAM reporting units had no goodwill carrying amounts due to previous impairments. The acquisitions changed the composition of each of the reporting units, triggering an interim impairment test. We determined that the carrying amount of each reporting unit exceeded its fair value as of December 25, 2021. As a result, we recognized a non-cash impairment loss of $53 million in SG&A in our International segment, which represented all of the goodwill of the EMEA East and LATAM reporting units.

As of December 25, 2021, we maintain 14 reporting units, 9 of which comprise our goodwill balance. These 9 reporting units had an aggregate goodwill carrying amount of ~~$36.5~~$31.3 billion asat December 25, 2021. As of ~~December 29, 2018.~~ their latest 2021 impairment testing date, 6 reporting units had 20% or less fair value over carrying amount and an aggregate goodwill carrying amount of $28.3 billion, 2 reporting units had between 20-50% fair value over carrying amount and a goodwill carrying amount of $2.2 billion, and 1 reporting unit had over 50% fair value over carrying amount and a goodwill carrying amount of $961 million.

We test our reporting units for impairment annually as of the first day of our second quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Accumulated impairment losses to goodwill were $10.9 billion at December 25, 2021 and $10.5 billion at December 26, 2020.

2020 Goodwill Impairment Testing

As previously disclosed, in the first quarter of 2020, following changes to our internal reporting and reportable segments, the composition of certain of our reporting units changed, and we performed an interim impairment test (or transition test) on the affected reporting units on both a pre- and post-reorganization basis.

We performed our ~~2018~~pre-reorganization impairment test as of December 29, 2019, which was our first day of 2020. There were no impairment losses resulting from our pre-reorganization impairment test.

We performed our post-reorganization impairment test as of December 29, 2019. There were 6 reporting units in scope for our post-reorganization impairment test: Northern Europe, Continental Europe, Asia, Australia, New Zealand, and Japan (“ANJ”), Latin America (“LATAM”), and Puerto Rico. As a result of our post-reorganization impairment test, we recognized a non-cash impairment loss of $226 million in SG&A in the first quarter of 2020 related to 2 reporting units contained within our International segment, including $83 million related to our ANJ reporting unit and $143 million related to our LATAM reporting unit, which represented all of the goodwill associated with these reporting units. The remaining reporting units tested as part of our post-reorganization impairment test each had excess fair value over carrying amount as of December 29, 2019.

We performed our 2020 annual impairment test as of ~~April 1, 2018.~~March 29, 2020, which was the first day of our second quarter in 2020. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. Through the performance of the 2020 annual impairment test, we identified impairments related to our U.S. Foodservice, Canada Retail, Canada Foodservice, and EMEA East reporting units. As a result, ~~of our 2018 annual impairment test,~~ we recognized a non-cash impairment loss of ~~$133~~$1.8 billion in SG&A in the second quarter of 2020, which included an $815 million impairment loss in our Canada Retail reporting unit within our Canada segment, a $655 million impairment loss in our U.S. Foodservice reporting unit within our United States segment, a $205 million impairment loss in our Canada Foodservice reporting unit within our Canada segment, and a $142 million impairment loss in our EMEA East reporting unit within our International segment. These impairments were primarily due to the completion of our enterprise strategy and five-year operating plan in the second quarter of 2020.

As previously disclosed, in the third quarter of 2020, following changes to our United States zone reporting structure, the composition of certain of our reporting units changed and we performed an interim impairment test (or transition test) on the affected reporting units on both a pre- and post-reorganization basis.

We performed our pre-reorganization impairment test as of June 28, 2020, which was our first day of the third quarter of 2020. There were no impairment losses resulting from this pre-reorganization impairment test.

We performed our post-reorganization impairment test as of June 28, 2020. There were 3 reporting units in scope for our post-reorganization impairment test: ESA, KSB, and Meal Foundations and Coffee (“MFC”). These reporting units, which were tested as part of this post-reorganization impairment test, each had excess fair value over carrying amount as of June 28, 2020.

Additionally, in the third quarter of 2020, we announced the Cheese Transaction and determined that the Cheese Disposal Group was held for sale. Accordingly, based on a relative fair value allocation, we reclassified $580 million of goodwill to assets held for sale, which included a portion of goodwill from 7 of our reporting units. Following the reclassification of a portion of goodwill from our reporting units, we determined that a triggering event had occurred for the remaining portion of each of the impacted reporting units, and we tested each for impairment as of September 15, 2020, the triggering event date. The triggering event impairment test did not result in an impairment of the remaining portion of any impacted reporting units.

In the third quarter of 2020, we recorded a non-cash impairment loss of $300 million in SG&A, which was related to ~~our Australia~~the Cheese Disposal Group’s goodwill. See Note 4, Acquisitions and ~~New Zealand reporting unit within our Rest of World segment primarily due to anticipated~~Divestitures, for additional information on the Cheese Transaction and ~~sustained margin declines in the region. The goodwill carrying amount of this reporting unit was $509 million prior to~~ its ~~impairment.~~financial statement impacts.

~~For the fourth quarter of 2018, in~~2019 Goodwill Impairment Testing

In connection with the preparation of our ~~year-end~~first quarter 2019 financial statements, we assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any reporting units were below their carrying amounts. Although our annual impairment test is performed during the second quarter, we perform this qualitative assessment each interim reporting period.

~~While there was no single determinative event or factor, the consideration in totality of several factors that developed during the fourth quarter of 2018 led us to conclude~~concluded that it was more likely than not that the fair values of ~~seven~~3 of our 20pre-reorganization reporting units ~~including U.S. Grocery, U.S. Refrigerated, Canada Retail, Australia~~(EMEA East, Brazil and ~~New Zealand, Northeast Asia, Southeast Asia, and Other~~ Latin America Exports) were below their carrying amounts. These factors included: (i) a sustained decrease in our share price in November and December of 2018, which reduced our market capitalization below the book value of net assets; (ii) the completion of our fourth quarter results, which were below management’s expectations due to several factorsAs such as higher than expected supply chain costs and increased competition; (iii) the development and approval of our 2019 annual operating plan in December 2018, which provided additional insights into expectations and priorities for the coming years, such as lower growth and margin expectations; (iv) the announcement in November 2018 to sell certain assets in our natural cheese portfolio in Canada, which changed the composition and use of the remaining assets and brands in the associated reporting unit; (v) fluctuations in foreign exchange rates in certain countries; (vi) increased interest rates in certain locations, including an increase in the United States in December 2018; and (vii) increased and prolonged economic and regulatory uncertainty in the United States and global economies as of the end of December 2018.

~~As we determined that it was more likely than not that the fair values of these seven reporting units were below their carrying amounts,~~ we performed an interim impairment test on these reporting units as of ~~December 29, 2018. After assessing the totality of circumstances, we determined that each of the remaining 13 reporting units was unlikely to have a fair value below carrying amount.~~

March 30, 2019. As a result of our interim impairment test, we recognized a non-cash impairment loss of ~~$6.9 billion~~$620 million in SG&A ~~related~~in the first quarter of 2019. We recorded a $286 million impairment loss in our EMEA East reporting unit, a $205 million impairment loss in our Brazil reporting unit, and a $129 million impairment loss in our Latin America Exports reporting unit. The impairment of the Brazil reporting unit represented all of the goodwill of that reporting unit. We determined the factors contributing to ~~five~~the impairment loss were the result of circumstances that arose during the first quarter of 2019. These reporting units ~~including U.S. Refrigerated, Canada Retail, Southeast Asia, Northeast Asia, and Other Latin America. The other two reporting units we tested~~ were ~~determined to not be impaired.~~part of our International segment as discussed above.

We performed our 2019 annual impairment test as of March 31, 2019, which was the first day of our second quarter in 2019. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. ~~Drivers~~Through the performance of ~~these impairment losses, by reporting unit, were as follows:~~

~~We recognized a $4.1 billion impairment loss in our U.S. Refrigerated reporting unit within our United States segment due to revised 2019 base and future year margin expectations, primarily in~~ the natural cheese and meats categories, and, to a lesser extent, expectations for lower long-term net sales growth in the natural and processed cheese categories. Changes in future year margin expectations were primarily driven by sustained increases in supply chain costs, expectations for lower pricing to maintain competitive positioning, and expectations for increased marketing investments, primarily in response to private label competition, as well as customer-driven packaging investments. Changes in expectations for lower long-term net sales growth were primarily due to sustained private label competition and anticipated trends in consumer preferences. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual ~~operating plan in December 2018. Additionally, our revised expectations were based on the development of our global five-year operating plan, which commenced in November 2018 and~~impairment test, we ~~expect~~identified an impairment related to ~~be completed in 2019. The goodwill carrying amount of~~ the U.S. Refrigerated reporting unit (one of our pre-reorganization reporting units). As a result, we recognized a non-cash impairment loss of $118 million in SG&A in the second quarter of 2019 within our United States segment. This impairment was ~~$11.3 billion prior~~primarily due to ~~its impairment.~~an increase in the discount rate used for fair value estimation.

In the fourth quarter of 2019, in connection with the preparation of our year-end financial statements, we determined that it was more likely than not that the fair values of 3 of our pre-reorganization reporting units (Australia and New Zealand, Latin America Exports, and Northeast Asia) were below their carrying amounts. As such, we performed an interim impairment test on these reporting units as of December 28, 2019. As a result of our interim impairment test, we recognized a non-cash impairment loss of $453 million in SG&A in the fourth quarter of 2019. We recognized a ~~$1.9 billion~~$357 million non-cash impairment loss in our ~~Canada Retail~~Australia and New Zealand reporting unit ~~within our Canada segment due to lower positive net sales growth expectations~~ and revised 2019 base and future year margin expectations, as well as the reassessment of our Canadian operations following the announcement in November to sell certain assets in our natural cheese portfolio in Canada. We revised our net sales growth expectations primarily due to our expected exit of the natural cheese category and expected declines in the coffee category (exclusive of our coffee business acquisition in Canada in 2018). Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. Changes in future year margin expectations were primarily driven by sustained increases in supply chain costs and expectations for lower pricing to maintain competitive positioning. The goodwill carrying amount of the Canada Retail reporting unit was $4.0 billion prior to its impairment.

~~We recognized~~ a ~~$315~~$96 million non-cash impairment loss in our ~~Southeast Asia~~Latin America Exports reporting unit. The impairment of the Australia and New Zealand reporting unit within our Rest of World segment due to margin and net sales declines in the seafood and seasonal cordials categories and foreign exchange rate declines in Indonesia and Papua New Guinea. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. This impairment representsrepresented all of the goodwill of that reporting unit. We determined the ~~Southeast~~factors contributing to the impairment loss were the result of circumstances that arose during the fourth quarter of 2019. These reporting units were part of our International segment as discussed above. We concluded that an impairment charge was not required for our Northeast Asia reporting unit.

We recognized a $302 million impairment loss in our Northeast Asia reporting unit within our Rest of World segment due to margin and net sales declines as well as foreign exchange rate declines in Japan and Korea. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. The goodwill carrying amount of the Northeast Asia reporting unit was $391 million prior to its impairment.

We recognized a $207 million impairment loss in our Other Latin America reporting unit within our Rest of World segment due to net sales and margin declines in the region. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. This impairment represents all of the goodwill of the Other Latin America reporting unit.

The goodwill carrying amounts associated with an additional four reporting units, which each had excess fair value over its carrying amount of 20% or less, were $18.5 billion for U.S. Grocery, $424 million for Latin America Exports, $404 million for Southeast Europe, and $367 million for Australia and New Zealand as of December 29, 2018.

~~Accumulated impairment losses to goodwill were $7.0 billion at December 29, 2018.~~Additional Goodwill Considerations

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax rates, discount rates, growth rates, and other market factors. If current expectations of future growth rates and margins are not met, if market factors outside of our control, such as discount rates, income tax rates, foreign currency exchange rates, or any factors that could be affected by COVID-19, change, or if management’s expectations or plans otherwise change, including ~~as a result of the development of~~updates to our ~~global five-year~~long-term operating ~~plan,~~plans, then one or more of our reporting units might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets has led and could in the future lead to goodwill impairments.

As discussed in Note 1, Basis of Presentation, during the fourth quarter of 2021, certain organizational changes were announced that will impact our future internal reporting and reportable segments. As a result of these changes, we plan to combine our United States and Canada zones to form the North America zone, and expect to have 2 reportable segments, North America and International. We expect that any change to our reportable segments would be effective in the second quarter of 2022. These changes are also expected to affect our reporting unit structure and will require an interim impairment test (or transition test) in the second quarter of 2022.

In 2020 and 2021, the COVID-19 pandemic has produced a short-term beneficial financial impact to our consolidated results. Retail sales have increased compared to pre-pandemic periods due to higher than anticipated consumer demand for our products. The foodservice channel, however, has experienced a negative impact from prolonged social distancing mandates limiting access to and capacity at away-from-home establishments for a longer period of time than was expected when they were originally put in place. Our Canada Foodservice reporting unit is the most exposed of our reporting units to the long-term impacts to away-from-home establishments as it is our only standalone foodservice reporting unit. While our other reporting units have varying levels of exposure to the foodservice channel, they also have exposure to the retail channel, which offsets some of the risk associated with the potential long-term impacts of shifts in net sales between retail and away-from-home establishments. Our Canada Foodservice reporting unit was impaired during our 2020 annual impairment test, reflecting our best estimate at that time of the future outlook and risks of this business. The Canada Foodservice reporting unit maintains an aggregate goodwill carrying amount of approximately $154 million as of December 25, 2021. A number of factors could result in further future impairments of our foodservice (or away-from-home) businesses, including but not limited to: mandates around closures of dining rooms in restaurants, distancing of people within establishments resulting in fewer customers, the total number of restaurant closures, changes in consumer preferences or regulatory requirements over product formats (e.g., table top packaging vs. single serve packaging), and consumer trends of dining-in versus dining-out. Given the evolving nature of, and uncertainty driven by, the COVID-19 pandemic, we will continue to evaluate the impact on our reporting units as adverse changes to these assumptions could result in future impairments.

Our reporting units that were impaired ~~in 2018~~ were written down to their respective fair values resulting in zero excess fair value over carrying amount as of ~~their latest 2018~~the applicable impairment ~~testing~~test dates. Accordingly, these and other ~~individual~~ reporting units that have 20% or less excess fair value over carrying amount as of their latest 2021 impairment testing date have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future. Reporting units with a heightened risk of future impairments had an aggregate goodwill carrying amount of $29.0 billion at December 29, 2018 and included: U.S. Grocery, U.S. Refrigerated, Canada Retail, Latin America Exports, Southeast Europe, Australia and New Zealand, and Northeast Asia. Of the $29.0 billion with a heightened risk of future impairments, $9.3 billion is attributable to reporting units with 0% excess fair value over carrying amount. Although the remaining reporting units have more than 20% excess fair value over carrying amount as of their latest ~~2018~~2021 impairment testing date, these amounts are also primarily associated with the 2013 Heinz ~~acquisition~~Acquisition and the 2015 Merger and are recorded on ~~the~~our consolidated balance sheet at their estimated acquisition date fair values. Therefore, if any assumptions, estimates, or market factors change in the future, these amounts are also susceptible to impairments.

Indefinite-lived intangible assets:

Changes in the carrying amount of indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions):


Balance at December 26, 2020	$	42,267
Impairment losses	(1,307)
Divestitures	(1,487)

Translation adjustments	(54)
Balance at December 25, 2021	$	39,419

Balance at December 30, 2017 $ 53,655
Impairment losses (8,925 )
Reclassified to assets held for sale (341 )
Transfers to definite-lived intangible assets (72 )
Translation adjustments (351 )
Balance at December 29, 2018 $ 43,966

At December 26, 2020, indefinite-lived intangible assets excluded amounts classified as held for sale related to the Cheese Transaction, which closed in the fourth quarter of 2021. Indefinite-lived intangible ~~assets~~asset amounts included in divestitures in the table above represent amounts previously reclassified to assets held for sale ~~included~~related to the ~~Cracker Barrel~~ Planterstrademarkin ~~Canada and~~ ~~Complan~~ ~~and~~ ~~Glucon-D~~ ~~trademarks~~connection with the Nuts Transaction, which closed in ~~India.~~the second quarter of 2021. See Note 5, 4, Acquisitions and Divestitures, for additional information on ~~assets held for sale at December 29, 2018 related to~~ the ~~Canada Natural~~ Cheese Transaction and the ~~Heinz India~~Nuts Transaction.

2021 Indefinite-Lived Intangible Asset Impairment Testing

We performed our 2021 annual impairment test as of March 28, 2021, which was the first day of our second quarter in 2021. As a result of our 2021 annual impairment test, we recognized a non-cash impairment loss of $69 million in SG&A in the second quarter of 2021 related to 2 brands, Plasmon and Maxwell House. We recorded non-cash impairment losses of $45 million in our International segment related to Plasmon and $24 million in our United States segment related to Maxwell House, consistent with the ownership of the trademarks. The impairment of the Plasmon brand was largely due to downward revised revenue expectations for infant nutrition in Italy. The impairment of the Maxwell House brand was primarily due to downward revised revenue expectations for mainstream coffee in the U.S. These brands had an aggregate carrying amount of $822 million prior to this impairment and $753 million after this impairment.

In the fourth quarter of 2021, following the monetization of the licensed portions of the Kraft and Velveeta brands in connection with the closing of the Cheese Transaction, we performed an interim impairment test on these brands as of November 29, 2021, the Cheese Transaction Closing Date. While the Velveeta brand had a fair value in excess of its carrying amount, the Kraft brand had a fair value below its carrying amount. Accordingly, we recorded a non-cash impairment loss of $1.2 billion in SG&A in the fourth quarter of 2021 related to the Kraft brand. We recognized this impairment loss in our United States segment, consistent with the ownership of the Kraft trademark.

Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of ~~$44.0~~$39.4 billion asat December 25, 2021. As of ~~December 29, 2018.~~their latest 2021 impairment testing date, brands with 20% or less fair value over carrying amount had an aggregate carrying amount after impairment of $21.3 billion, brands with between 20-50% fair value over carrying amount had an aggregate carrying amount of $6.5 billion, and brands that had over 50% fair value over carrying amount had an aggregate carrying amount of $11.8 billion. We test our brands for impairment annually as of the first day of our second quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a brand is less than its carrying amount.

2020 Indefinite-Lived Intangible Asset Impairment Testing

We performed our ~~2018~~2020 annual impairment test as of ~~April 1, 2018.~~March 29, 2020, which was the first day of our second quarter in 2020. As a result of our ~~2018~~2020 annual impairment test, we recognized a non-cash impairment loss of ~~$101~~$1.1 billion in SG&A in the second quarter of 2020 primarily related to 9 brands (Oscar Mayer, Maxwell House, Velveeta, Cool Whip, Plasmon, ABC, Classico, Wattie’s, and Planters), which included impairment losses of $949 million in our United States segment, $100 million in our International segment, and $7 million in our Canada segment, consistent with the ownership of the trademarks. We recognized a $626 million impairment loss related to the Oscar Mayer brand, a $140 million impairment loss related to the Maxwell House brand, and a $290 million impairment loss primarily related to 7 other brands (Velveeta, Cool Whip, Plasmon, ABC, Classico, Wattie’s, and Planters).

2019 Indefinite-Lived Intangible Asset Impairment Testing

We performed our 2019 annual impairment test as of March 31, 2019, which was the first day of our second quarter in 2019. As a result of our 2019 annual impairment test, we recognized a non-cash impairment loss of $474 million in SG&A in the second quarter of ~~2018. This impairment loss was due to net sales and margin declines~~2019 primarily related to ~~the~~ ~~Quero~~ ~~brand in Brazil, which was valued using the relief from royalty method. The impairment loss was recorded in our Rest of World segment, consistent with the ownership of the trademark.~~

~~In the third quarter of 2018, we recognized a non-cash impairment loss of $215 million in SG&A related to the~~ ~~Smart Ones~~ ~~brand, which was valued using the relief from royalty method.~~6 brands (Miracle Whip, Velveeta, Lunchables, MaxwellHouse, Philadelphia, and CoolWhip). This ~~impairment loss was primarily due to reduced future investment expectations and continued sales declines in the third quarter of 2018. The~~ impairment loss was recorded in our United States segment, consistent with the ownership of the ~~trademark. We transferred the remaining carrying amount of~~ ~~Smart Ones~~ ~~to definite-lived intangible assets~~trademarks. The impairment for these brands was largely due to ~~a shift in future investments to other brands~~an increase in the ~~frozen~~discount rate assumptions used for the fair value estimations. These brands had an aggregate carrying value of $13.5 billion prior to this impairment and ~~chilled foods category.~~$13.0 billion after this impairment.

~~For~~In the fourth quarter of ~~2018,~~2019, in connection with the preparation of our year-end financial statements, we assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any brands were below their carrying amounts. Although our annual impairment test is performed during the second quarter, we perform this qualitative assessment each interim reporting period.

While there was no single determinative event or factor, the consideration in totality of several factors that developed during the fourth quarter of 2018 led us to conclude that it was more likely than not that the fair values of six of our brands, including ~~Kraft~~, ~~Philadelphia~~, ~~Oscar Mayer~~, ~~Velveeta~~, ~~Cool Whip, and~~ ~~ABC, were below their carrying amounts. These factors were the same fourth quarter circumstances outlined in the goodwill impairment discussion above. As~~ we determined that it was more likely than not that the fair values of ~~these six~~2 of our brands,Maxwell House and Wattie’s, were below their carrying ~~amounts,~~amounts. As a result, we performed an interim impairment test on these brands as of December ~~29, 2018. After assessing the totality of circumstances,~~28, 2019. While we determined that ~~each of~~ the ~~remaining brands~~Wattie’s brand was ~~unlikely to have a fair value below its carrying amount.~~

~~As a result of our interim test,~~not impaired, we recognized a non-cash impairment loss of ~~$8.6 billion~~$213 million in SG&A ~~related to five brands, including three that were valued using the excess earnings method (Kraft~~, ~~OscarMayer, and~~ ~~Philadelphia) and two that were valued using the relief from royalty method (Velveeta~~ ~~and~~ ~~ABC). The other brand we tested was determined to not be impaired. The impairment losses for~~ ~~Kraft~~, ~~OscarMayer~~, ~~Philadelphia,~~ ~~and~~ ~~Velveeta~~ ~~were recorded~~ in our United States ~~segment, and the~~ ~~ABC~~ ~~impairment loss was recorded in our Rest of World~~ segment, consistent with the ownership of ~~each trademark. Drivers~~the Maxwell House trademark, in the fourth quarter of ~~these impairment losses, by brand, were as follows:~~

2019. We ~~recognized a $4.3 billion~~determined the factors contributing to the impairment loss ~~related to~~were the ~~Kraft~~ ~~brand, primarily due to lower long-term net sales growth expectations in~~result of circumstances that arose during the natural cheese category in the United States, lower net sales growth expectations in the processed cheese category in the United States and Canada, and the exit of the natural cheese category in Canada announced in November 2018. Changes in expectations for lower net sales growth were primarily due to distribution losses driven by sustained private label competition and anticipated trends in consumer preferences. Our revised expectations were based on the completion of our fourth quarter ~~results, which were below management’s expectations, and the development~~ of our 2019 annual operating plan in December 2018. Additionally, our revised expectations were based on the development of our global five-year operating plan, which commenced in November 2018 and we expect to be completed in 2019. ~~The carrying amount of the~~ ~~Kraft~~ ~~brand was $15.9 billion prior to its impairment.~~

~~We recognized a $3.3 billion impairment loss related to the~~ ~~Oscar Mayer~~ brand, primarily due to revised 2019 annual and future margin expectations in the United States. Changes in future year margin expectations were primarily driven by sustained increases in supply chain costs, expectations for lower pricing to maintain competitive positioning, and expectations for increased marketing investments and customer-driven packaging investments. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. Additionally, our revised expectations were based on the development of our global five-year operating plan, which commenced in November 2018 and we expect to be completed in 2019. The carrying amount of the ~~Oscar Mayer~~ ~~brand was $6.6 billion prior to its impairment.~~

Additional Indefinite-Lived Intangible Asset Considerations

~~We recognized a $797 million impairment loss related to the~~ ~~Philadelphia~~ brand, primarily due to revised 2019 annual and future margin expectations, and to a lesser extent, lower future positive net sales growth expectations in the United States. Changes in future year margin expectations were primarily driven by sustained increases in supply chain costs and expectations for lower pricing to maintain competitive positioning, as well as unfavorable changes in product mix and customer-driven packaging investments. Our revised expectations were based on the completion of our fourth quarter results, which were below management’s expectations, and the development of our 2019 annual operating plan in December 2018. Additionally, our revised expectations were based on the development of our global five-year operating plan, which commenced in November 2018 and we expect to be completed in 2019. The carrying amount of the ~~Philadelphia~~ ~~brand was $6.7 billion prior to its impairment.~~

~~We recognized a $168 million impairment loss related to the~~ ~~Velveeta~~ ~~brand, primarily due to expectations for lower long-term net sales growth due to anticipated trends in consumer preferences. The carrying amount of the~~ ~~Velveeta~~ ~~brand was $2.5 billion prior to its impairment.~~

~~We recognized an $84 million impairment loss related to the~~ ~~ABC~~ brand, primarily due to revised expectations of future net sales growth and margins in the seafood and seasonal cordials categories in Southeast Asia as well as foreign exchange rates in the regions in which this brand is sold. The carrying amount of the ~~ABC~~ ~~brand was $357 million prior to its impairment.~~

~~The aggregate carrying amount associated with an additional six brands (Miracle Whip~~, ~~Planters~~, A1, ~~Cool Whip~~, ~~Stove Top, and~~ ~~Quero), which each had excess fair value over its carrying amount of 20% or less, was $5.8 billion as of December 29, 2018.~~

As a result of our 2017 annual impairment testing, we recognized a non-cash impairment loss of $49 million in SG&A in the second quarter of 2017. This loss was due to continued declines in nutritional beverages in India. The loss was recorded in our EMEA segment as the related trademark is owned by an Italian subsidiary.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual brands requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, growth rates, royalty rates, contributory asset charges, and other market factors. If current expectations of future growth rates and margins are not met, if market factors outside of our control, such as discount rates, income tax rates, foreign currency exchange rates, or any factors that could be affected by COVID-19, change, or if management’s expectations or plans otherwise change, including ~~as a result of the development of~~updates to our ~~global five-year~~long-term operating ~~plan,~~plans, then one or more of our brands might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets has led and could in the future lead to intangible asset impairments.

As we consider the ongoing impact of the COVID-19 pandemic with regard to our indefinite-lived intangible assets, a number of factors could have a future adverse impact on our brands, including changes in consumer and consumption trends in both the short and long term, the extent of government mandates to shelter in place, total number of restaurant closures, economic declines, and reductions in consumer discretionary income. We have seen an increase in our retail business, as compared to pre-pandemic levels, in the short term that has more than offset declines in our foodservice business over the same period. Our brands are generally common across both the retail and foodservice businesses and the fair value of our brands are subject to a similar mix of positive and negative factors. Given the evolving nature and uncertainty driven by the COVID-19 pandemic, we will continue to evaluate the impact on our brands.

Our brands that were impaired ~~in 2018~~ were written down to their respective fair values resulting in zero excess fair value over carrying amount as of ~~their latest 2018~~the applicable impairment ~~testing~~test dates. Accordingly, these and other individual brands that have 20% or less excess fair value over carrying amount as of their latest 2021 impairment testing date have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future. ~~Brands with a heightened risk of future impairments had an aggregate carrying amount of $29.3 billion at December 29, 2018 and included:~~ ~~Kraft~~, ~~Philadelphia~~, ~~Oscar Mayer~~, ~~Velveeta~~, ~~Miracle Whip~~, ~~Planters~~, A1, ~~Cool Whip~~, ~~Stove Top~~, ~~ABC, and~~ ~~Quero. Of the $29.3 billion with a heightened risk of future impairments, $24.0 billion is attributable to brands with 0% excess fair value over carrying amount.~~ Although the remaining brands have more than 20% excess fair value over carrying amount as of their latest ~~2018~~2021 impairment testing date, these amounts are also associated with the 2013 Heinz ~~acquisition~~Acquisition and the 2015 Merger and are recorded on ~~the~~our consolidated balance sheet at their estimated acquisition date fair values. Therefore, if any assumptions, estimates, or market factors change in the future, these amounts are also susceptible to impairments.

Definite-lived intangible assets:

Definite-lived intangible assets were (in millions):


								As Restated
	December 29, 2018							December 30, 2017								December 25, 2021						December 26, 2020
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net			Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Trademarks	$	2,474	$	(402	)	$	2,072	$	2,368	$	(287	)	$	2,081	Trademarks	$	2,091	$	(556)	$	1,535	$	2,000	$	(478)	$	1,522
Customer-related assets	4,097		(681		)	3,416		4,231		(544		)	3,687		Customer-related assets	3,617		(1,040)		2,577		3,808		(942)		2,866
Other	18		(4		)	14		14		(5		)	9		Other	17		(6)		11		15		(3)		12
	$	6,589	$	(1,087	)	$	5,502	$	6,613	$	(836	)	$	5,777		$	5,725	$	(1,602)	$	4,123	$	5,823	$	(1,423)	$	4,400

~~Definite-lived~~At December 25, 2021 and December 26, 2020, definite-lived intangible ~~asset balances at December 30, 2017 reflect the restatements described in~~assets excluded amounts classified as held for sale. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements~~.4, Acquisitions and Divestitures, for additional information on amounts held for sale.

Amortization expense for definite-lived intangible assets was ~~$290~~$239 million in ~~2018, $278~~2021, $264 million in ~~2017,~~2020, and ~~$267~~$286 million in ~~2016.~~2019. Aside from amortization expense, the ~~changes~~decrease in definite-lived intangible assets from December ~~30, 2017~~26, 2020 to December ~~29, 2018~~25, 2021 primarily ~~reflect~~reflects the ~~reclassification~~assets sold in connection with the Nuts Transaction, including certain customer-related assets with a net carrying value of $133 million and the Corn Nuts trademark with a net carrying value of $25 million, the impact of foreign currency, and $9 million of non-cash impairment losses related to ~~assets held for sale~~a trademark in our International segment. These impacts were partially offset by $143 million of ~~$96 million,~~ additions ~~of $100~~primarily related to the Cracker Barrel license in connection with the Cheese Transaction and $14 million related to ~~purchase accounting~~assets reclassified as held and used. See Note 4, Acquisitions and Divestitures, for ~~Cerebos, transfers of $72 million from indefinite-lived intangible assets, impairment losses of $3 million,~~additional information on the Nuts Transaction and ~~foreign currency.~~the Cheese Transaction. The impairment of definite-lived intangible assets in ~~2018~~the second quarter of 2021 related to a trademark ~~which~~that had a net carrying ~~amount~~value that was deemed not to be recoverable. This $9 million non-cash impairment loss was recognized in SG&A. ~~Definite-lived intangible assets reclassified to assets held for sale included customer-related assets in Canada and India and certain trademarks, including~~ ~~P’Tit Quebec~~ ~~in Canada. See Note 5,~~ ~~Acquisitions and Divestitures, for additional information related to our acquisition of Cerebos in 2018, as well as our assets held for sale at December 29, 2018.~~

We estimate that amortization expense related to definite-lived intangible assets will be approximately ~~$284~~$240 million in ~~2019~~2022 and ~~approximately $274~~2023 and $230 million in each of the ~~four fiscal years thereafter.~~following three years.

Note ~~11.~~10. Income Taxes

Provision for/(Benefit from) Income Taxes:

Income/(loss) before income taxes and the provision for/(benefit from) income taxes, consisted of the following (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Income/(loss) before income taxes:
United States	$	(215)	$	363	$	796
Non-U.S.	1,923		667		1,865
Total	$	1,708	$	1,030	$	2,661

Provision for/(benefit from) income taxes:
Current:
U.S. federal	$	1,421	$	634	$	466
U.S. state and local	120		91		116
Non-U.S.	185		287		439
	1,726		1,012		1,021
Deferred:
U.S. federal	(1,086)		(232)		(209)
U.S. state and local	(211)		(109)		(7)
Non-U.S.	255		(2)		(77)
	(1,042)		(343)		(293)
Total provision for/(benefit from) income taxes	$	684	$	669	$	728

We record tax benefits related to the exercise of stock options and other equity instruments within our tax provision. Accordingly, we recognized a tax benefit in our consolidated statements of income of $8 million in 2021, $4 million in 2020, and $12 million in 2019 related to tax benefits upon the exercise of stock options and other equity instruments.

Effective Tax Rate:

The effective tax rate on income/(loss) before income taxes differed from the U.S. ~~Tax Reform:~~federal statutory tax rate for the following reasons:

~~On December 22, 2017, U.S. Tax Reform legislation~~


	December 25, 2021		December 26, 2020		December 28, 2019
U.S. federal statutory tax rate	21.0	%	21.0	%	21.0	%
Tax on income of foreign subsidiaries	(12.9)	%	(26.1)	%	(7.5)	%
U.S. state and local income taxes, net of federal tax benefit	(0.5)	%	0.6	%	1.1	%
Audit settlements and changes in uncertain tax positions	0.4	%	3.7	%	1.3	%
Global intangible low-taxed income	5.5	%	6.5	%	1.8	%
Goodwill impairment	4.7	%	57.2	%	9.3	%
(Losses)/gains related to acquisitions and divestitures	12.9	%	0.1	%	1.0	%
Movement of valuation allowance reserves	0.1	%	(0.4)	%	1.3	%
Deferred tax effect of tax law changes	9.8	%	(2.1)	%	(0.5)	%
Other	(0.9)	%	4.5	%	(1.4)	%
Effective tax rate	40.1	%	65.0	%	27.4	%

The provision for income taxes consists of provisions for federal, state, and foreign income taxes. We operate in an international environment; accordingly, the consolidated effective tax rate is a composite rate reflecting the earnings in various locations and the applicable tax rates. Additionally, the calculation of the percentage point impact of goodwill impairment and other items on the effective tax rate shown in the table above are affected by income/(loss) before income taxes. The percentage point impacts on the effective tax rates fluctuate due to income/(loss) before income taxes, which included goodwill and intangible asset impairment losses in all years presented in the table. Fluctuations in the amount of income generated across locations around the world could impact comparability of reconciling items between periods. Additionally, small movements in tax rates due to a change in tax law or a change in tax rates that causes us to revalue our deferred tax balances produces volatility in our effective tax rate.

Our 2021 effective tax rate was ~~enacted~~an expense of 40.1% on pre-tax income. Our effective tax rate was unfavorably impacted by rate reconciling items, primarily the tax impacts related to acquisitions and divestitures, which mainly reflect the impacts of the Nuts Transaction and Cheese Transaction, partially offset by current year capital losses; the revaluation of our deferred tax balances due to changes in international and state tax rates, mainly an increase in U.K. tax rates; the impact of the federal government. The legislation significantly changed U.S. tax laws by, among other things, lowering the federal corporate tax rate from 35.0% to 21.0%, effective January 1, 2018 and imposing a one-time toll charge on deemed repatriated earnings of foreign subsidiaries as of December 30, 2017. In addition, there were many new provisions, including changes to bonus depreciation, revised deductions for executive compensation and interest expense, a tax on global intangible low-taxed income (“GILTI”)~~, the base erosion anti-abuse tax (“BEAT”),~~; and non-deductible goodwill impairments. These impacts were partially offset by a ~~deduction for foreign-derived intangible~~favorable geographic mix of pre-tax income ~~(“FDII”). While the corporate~~in various non-U.S. jurisdictions.

Our 2020 effective tax rate ~~reduction~~ was an expense of 65.0% on pre-tax income. Our effective ~~January 1, 2018, we accounted for this anticipated~~tax rate ~~change in 2017,~~was unfavorably impacted by rate reconciling items, primarily related to non-deductible goodwill impairments, the ~~period~~impact of ~~enactment.~~

~~Staff Accounting Bulletin No. 118 issued by~~ the ~~SEC in December 2017 provided us with up to one year to finalize accounting for~~federal tax on GILTI, and the ~~impacts of U.S. Tax Reform and allowed for provisional estimates when actual amounts could not be determined. As of December 30, 2017, we had made estimates~~revaluation of our deferred tax balances due to changes in international tax laws. These impacts were partially offset by a more favorable geographic mix of pre-tax income in various non-U.S. jurisdictions and the favorable impact of establishing certain deferred tax assets for state tax deductions.

Our 2019 effective tax rate was an expense of 27.4% on pre-tax income. Our effective tax rate was unfavorably impacted by rate reconciling items, primarily related to non-deductible goodwill impairments, the impact of the federal tax on GILTI, an increase in uncertain tax position reserves, the establishment of certain state valuation allowance reserves, and the tax impacts from the Heinz India Transaction and Canada Natural Cheese Transaction. These impacts were partially offset by the reversal of certain withholding tax obligations and changes in estimates of certain 2018 U.S. income and deductions.

See Note 9, Goodwill and Intangible Assets, for additional information related to our impairment losses. See Note 4, Acquisitions and Divestitures, for additional information on the Nuts Transaction, Cheese Transaction, Heinz India Transaction, and Canada Natural Cheese Transaction.

Deferred Income Tax Assets and Liabilities:

The tax effects of temporary differences and carryforwards that gave rise to deferred income tax ~~benefit~~assets and liabilities consisted of the following (in millions):


	December 25, 2021		December 26, 2020
Deferred income tax liabilities:
Intangible assets, net	$	10,215	$	11,041
Property, plant and equipment, net	765		764
Other	335		183
Deferred income tax liabilities	11,315		11,988
Deferred income tax assets:
Benefit plans	(84)		(177)
Deferred income	(373)		(29)
Other	(557)		(552)
Deferred income tax assets	(1,014)		(758)
Valuation allowance	101		105
Net deferred income tax liabilities	$	10,402	$	11,335

At December 26, 2020, deferred income tax liabilities excluded amounts classified as held for sale. See Note 4, Acquisitions and Divestitures, for additional information.

The decrease in net deferred income tax liabilities from December 26, 2020 to December 25, 2021 was primarily driven by a decrease in deferred income tax liabilities due to the disposition of intangible assets in connection with the Nuts Transaction and the Cheese Transaction and intangible asset impairment losses in 2021 as well as an increase in deferred income tax assets related to deferred income from the Cheese Divestiture Licenses. See Note 4, Acquisitions and Divestitures, for additional information related to the ~~corporate rate change,~~Nuts Transaction and Cheese Transaction and their financial statement impacts. See Note 9, Goodwill and Intangible Assets, for additional information on the ~~toll charge, certain components of~~impairment losses.

At December 25, 2021, foreign operating loss carryforwards totaled $511 million. Of that amount, $38 million expire between 2022 and 2041; the ~~revaluation~~other $474 million do not expire. We have recorded $146 million of deferred tax assets related to these foreign operating loss carryforwards. Deferred tax assets of $57 million have been recorded for U.S. state and local operating loss carryforwards. These losses expire between 2022 and 2041.

Uncertain Tax Positions:

At December 25, 2021, our unrecognized tax benefits for uncertain tax positions were $441 million. If we had recognized all of these benefits, the impact on our effective tax rate would have been $406 million. It is reasonably possible that our unrecognized tax benefits will decrease by as much as $38 million in the next 12 months primarily due to the progression of federal, state, and foreign audits in process. Our unrecognized tax benefits for uncertain tax positions are included in income taxes payable and other non-current liabilities ~~including depreciation~~on our consolidated balance sheets.

The changes in our unrecognized tax benefits were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Balance at the beginning of the period	$	421	$	406	$	387
Increases for tax positions of prior years	13		13		28
Decreases for tax positions of prior years	(51)		(34)		(39)
Increases based on tax positions related to the current year	75		57		60
Decreases due to settlements with taxing authorities	(1)		(8)		(20)
Decreases due to lapse of statute of limitations	(16)		(13)		(10)

Balance at the end of the period	$	441	$	421	$	406

Our unrecognized tax benefits increased during 2021 and ~~executive compensation,~~2020 mainly as a result of a net increase for tax positions related to the current and prior years in the U.S. and certain state and foreign jurisdictions, which were partially offset by decreases related to audit settlements with federal, state, and foreign taxing authorities and statute of limitations expirations.

We include interest and penalties related to uncertain tax positions in our tax provision. Our provision for/(benefit from) income taxes included a $9 million expense in 2021 and a ~~change~~$10 million expense in ~~our indefinite reinvestment assertion. In connection with U.S. Tax Reform, we reassessed our international investment assertion~~2020 related to interest and ~~no longer consider the historic earnings of our foreign subsidiaries~~penalties. The expense related to interest and penalties in 2019 was insignificant. Accrued interest and penalties were $81 million as of December ~~30, 2017~~25, 2021 and $72 million as of December 26, 2020.

Other Income Tax Matters:

Tax Examinations:

In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Brazil, Canada, Italy, the Netherlands, the United Kingdom, and the United States. As of December 25, 2021, we have substantially concluded all national income tax matters through 2019 for the Netherlands, through 2016 for the United States, through 2016 for Australia, through 2012 for the United Kingdom and Canada, through 2014 for Italy, and through 2006 for Brazil. We have substantially concluded all U.S. state income tax matters through 2007.

Cash Held by International Subsidiaries:

Related to our undistributed historic earnings that are currently not considered to be indefinitely ~~reinvested. We made an estimate of local country withholding taxes that would be owed when our historic earnings are distributed. Additionally,~~reinvested, we ~~elected to account for the tax on GILTI as a period cost and thus did not adjust any of the deferred tax assets and liabilities of our foreign subsidiaries for U.S. Tax Reform.~~

Our initial accounting for U.S. Tax Reform as of December 30, 2017 resulted in a net tax benefit of approximately $7.0 billion, including an estimate of our deferred income tax benefit of approximately $7.5 billion related to the corporate rate change, which was partially offset by an estimate of $312 million for the toll charge and approximately $125 million for other tax expenses, including a change in our indefinite reinvestment assertion. Related to our indefinite reinvestment assertion change, we had ~~recorded an estimate of deferred tax liabilities of $96 million on approximately $1.2 billion of historic earnings as of December 30, 2017.~~

In the first quarter of 2018, we recorded a measurement period adjustment to reduce income tax expense and reduce deferred tax liabilities each by approximately $20 million. We also recorded insignificant measurement period adjustments in the second, third, and fourth quarters of 2018.

As of December 29, 2018, we had finalized our accounting for U.S. Tax Reform. The final impact (the majority of which was recorded in 2017, the period of enactment) was a net tax benefit of approximately $7.1 billion, including a deferred tax benefit of approximately $7.5 billion related to the corporate rate change, partially offset by tax expense of $224 million related to the toll charge and $120 million for other tax expenses, including the deferred tax liability recorded for changing our indefinite reinvestment assertion. Related to our indefinite reinvestment assertion change, we had a deferred tax liability of $111 million on approximately $1.2 billion of historic earnings as of December 30, 2017.

~~Additionally, we~~ recorded a deferred tax liability of ~~$33~~approximately $10 million ~~as of December 29, 2018 to reflect our investment in an Indian subsidiary that is no longer considered to be indefinitely reinvested. At the same time, we reversed $28~~on approximately $135 million of ~~deferred tax liabilities related to local withholding tax obligations. As of~~historic earnings at December ~~29, 2018, we have recorded~~25, 2021 and a deferred tax liability of ~~$78~~approximately $20 million on ~~$1.2 billion~~approximately $300 million of historic earnings ~~related~~at December 26, 2020. The deferred tax liability relates to local withholding taxes that will be owed when this cash is distributed.

WeSubsequent to January 1, 2018, we consider the unremitted ~~current year~~ earnings of certain international subsidiaries that impose local country taxes on dividends to be indefinitely reinvested. For those undistributed earnings considered to be indefinitely reinvested, our intent is to reinvest these funds in our international operations, and our current plans do not demonstrate a need to repatriate the accumulated earnings to fund our U.S. cash requirements. The amount of unrecognized deferred tax liabilities for local country withholding taxes that would be owed related to our ~~current year~~2018 through 2021 accumulated earnings of certain international subsidiaries is approximately ~~$20~~$50 million.

Divestitures:

~~Provision for/(Benefit from) Income Taxes:~~

~~Income/(loss) before income~~In the second half of 2021, we paid approximately $700 million of cash taxes ~~and the provision for/(benefit from) income taxes, consisted of the following (in millions):~~

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Income/(loss) before income taxes:
United States $ (10,305 ) $ 3,811
$ 3,271
International (1,016 ) 1,639
1,668
Total $ (11,321 ) $ 5,450
$ 4,939

Provision for/(benefit from) income taxes:
Current:
U.S. federal $ 444
$ 765
$ 1,085
U.S. state and local 134
(47 ) 82
International 322
295
238
900
1,013
1,405
Deferred:
U.S. federal (1,843 ) (6,590 ) (11 )
U.S. state and local (121 ) 97
(63 )
International (3 ) (2 ) 2
(1,967 ) (6,495 ) (72 )
Total provision for/(benefit from) income taxes $ (1,067 ) $ (5,482 ) $ 1,333

~~Tax benefits~~ related to the ~~exercise of stock options and other equity instruments recorded directly to additional paid-in capital totaled $30 million in 2016.~~ Nuts Transaction.

In the first ~~quarter~~half of ~~2017,~~2022, we ~~prospectively adopted ASU 2016-09. We now record tax benefits~~expect to pay cash taxes of approximately $620 million related to the exercise of stock options and other equity instruments within our tax provision, rather than within equity. Accordingly, we recognized a tax benefit in our statements of income of $12 million in 2018 and $22 million in 2017 related to tax benefits upon the exercise of stock options and other equity instruments.Cheese Transaction.

~~Effective Tax Rate:~~

~~The effective tax rate on income/(loss) before income taxes differed from the U.S. federal statutory tax rate for the following reasons:~~

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
U.S. federal statutory tax rate 21.0 % 35.0 % 35.0 %
Tax on income of foreign subsidiaries 3.4 % (4.8 )% (3.6 )%
Domestic manufacturing deduction — % (1.5 )% (2.0 )%
U.S. state and local income taxes, net of federal tax benefit 1.6 % 1.1 % 0.8 %
Tax exempt income — % (0.7 )% (3.4 )%
Deferred tax effect of statutory tax rate changes (0.9 )% 0.3 % (2.0 )%
Audit settlements and changes in uncertain tax positions (0.3 )% (0.2 )% 1.9 %
Venezuela nondeductible devaluation loss (0.4 )% — % 0.3 %
U.S. Tax Reform discrete income tax benefit 0.5 % (129.0 )% — %
Global intangible low-taxed income (0.5 )% — % — %
Goodwill impairment (15.1 )% — % — %
Wind-up of non-U.S. pension plans (0.4 )% — % — %
Other 0.5 % (0.8 )% — %
Effective tax rate 9.4 % (100.6 )% 27.0 %

The provision for income taxes consists of provisions for federal, state, and foreign income taxes. We operate in an international environment; accordingly, the consolidated effective tax rate is a composite rate reflecting the earnings in various locations and the applicable tax rates. Additionally, the calculation of the percentage point impact of U.S. Tax Reform, tax exempt income, and other items on the effective tax rate shown in the table above are affected by income/(loss) before income taxes. Fluctuations in the amount of income generated across locations around the world could impact comparability of reconciling items between periods. Additionally, small movements in tax rates due to a change in tax law or a change in tax rates that causes us to revalue our deferred tax balances produces volatility in our effective tax rate.

The 2018 effective tax rate was lower, primarily due to a decrease in the U.S. federal statutory rate, non-deductible items (including goodwill impairments, nonmonetary currency devaluation losses, and the wind-up of non-U.S. pension plans), the impact of the federal tax on GILTI, and the revaluation of our deferred tax balances due to changes in state tax laws following U.S. Tax Reform, which were partially offset by the benefit from intangible asset impairment losses in the fourth quarter of 2018. See Note 10, ~~Goodwill and Intangible Assets, for additional information related to our impairment losses in the fourth quarter of 2018.~~

The tax provision for the 2017 tax year benefited from U.S. Tax Reform enacted on December 22, 2017. The related income tax benefit of 129.0% in 2017 primarily reflects adjustments to our deferred tax positions for the lower federal income tax rate, partially offset by our provision for the one-time toll charge.

The tax provision for the 2016 tax year included a benefit related to the tax effect of statutory tax rate changes, including a benefit related to the impact on deferred taxes of a 10-basis-point reduction in the state tax rate and a 100-basis-point statutory rate reduction in the United Kingdom.

~~Deferred Income Tax Assets and Liabilities:~~

~~The tax effects of temporary differences and carryforwards that gave rise to deferred income tax assets and liabilities consisted of the following (in millions):~~

As Restated
December 29, 2018 December 30, 2017
Deferred income tax liabilities:
Intangible assets, net $ 11,571
$ 13,567
Property, plant and equipment, net 735
676
Other 410
288
Deferred income tax liabilities 12,716
14,531
Deferred income tax assets:
Benefit plans (172 ) (212 )
Other (470 ) (422 )
Deferred income tax assets (642 ) (634 )
Valuation allowance 81
80
Net deferred income tax liabilities $ 12,155
$ 13,977

~~At December 29, 2018, deferred income tax liabilities excluded amounts classified as held for sale. See Note 5,~~ ~~Acquisitions and Divestitures, for additional information.~~

~~The decrease in deferred tax liabilities from December 30, 2017 to December 29, 2018 was primarily driven by intangible asset impairment losses recorded in the fourth quarter of 2018. See Note 10,~~ ~~Goodwill and Intangible Assets, for additional information.~~

At December 29, 2018, foreign operating loss carryforwards totaled $307 million. Of that amount, $26 million expire between 2019 and 2038; the other $281 million do not expire. We have recorded $86 million of deferred tax assets related to these foreign operating loss carryforwards. Deferred tax assets of $90 million have been recorded for U.S. state and local operating loss carryforwards. These losses expire between 2019 and 2038.

~~Uncertain Tax Positions:~~

At December 29, 2018, our unrecognized tax benefits for uncertain tax positions were $387 million. If we had recognized all of these benefits, the impact on our effective tax rate would have been $352 million. It is reasonably possible that our unrecognized tax benefits will decrease by as much as $54 million in the next 12 months primarily due to the progression of federal, state, and foreign audits in process. Our unrecognized tax benefits for uncertain tax positions are included in income taxes payable and other non-current liabilities on our consolidated balance sheets.

~~The changes in our unrecognized tax benefits were (in millions):~~

December 29,
2018 December 30,
2017 December 31,
2016
Balance at the beginning of the period $ 408
$ 389
$ 353
Increases for tax positions of prior years 9
2
59
Decreases for tax positions of prior years (81 ) (35 ) (18 )
Increases based on tax positions related to the current year 74
135
62
Decreases due to settlements with taxing authorities (3 ) (59 ) (62 )
Decreases due to lapse of statute of limitations (10 ) (24 ) (5 )
Reclassified to liabilities held for sale (10 ) —
—
Balance at the end of the period $ 387
$ 408
$ 389

Our unrecognized tax benefits decreased during 2018 mainly as a result of audit settlements with federal, state, and foreign taxing authorities and statute of limitations expirations. Our unrecognized tax benefits increased during 2017 as a result of evaluating tax positions taken or expected to be taken on our federal, state, and foreign income tax returns.

In 2016, we reached an agreement with the IRS resolving all Kraft open matters related to the audits of taxable years 2012 through 2014. This settlement reduced our reserves for uncertain tax positions and resulted in a non-cash tax benefit of $42 million.

We include interest and penalties related to uncertain tax positions in our tax provision. Our provision for/(benefit from) income taxes included a $5 million expense in 2018, $24 million benefit in 2017, and $8 million expense in 2016 related to interest and penalties. Accrued interest and penalties were $62 million as of December 29, 2018 and $57 million as of December 30, 2017.

~~Other Income Tax Matters:~~

In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, Italy, the Netherlands, the United Kingdom, and the United States. As of December 29, 2018, we have substantially concluded all national income tax matters through 2016 for the Netherlands, through 2014 for the United States, through 2012 for the United Kingdom, through 2011 for Australia, Canada, and Italy. We have substantially concluded all state income tax matters through 2007. Additionally, as of April 2019, we had substantially concluded all national income tax matters through 2015 for the United States.

We have a tax sharing agreement with Mondelēz International, Inc. (“Mondelēz International”), which generally provides that (i) we are liable for U.S. state income taxes and Canadian federal and provincial income taxes for Kraft periods prior to October 1, 2012 and (ii) Mondelēz International is responsible for U.S. federal income taxes and substantially all non-U.S. income taxes, excluding Canadian income taxes, for Kraft periods prior to October 1, 2012.

Kraft's U.S. operations were included in Mondelēz International's U.S. federal consolidated income tax returns for tax periods through October 1, 2012. In December 2016, Mondelēz International reached a final resolution on a U.S. federal income tax audit of the 2010-2012 tax years. As noted above, we are indemnified for U.S. federal income taxes related to these periods.

Note ~~12.~~11. Employees’ Stock Incentive Plans

We grant equity awards, including stock options, restricted stock units (“RSUs”), and performance share units (“PSUs”), to select employees to provide long-term performance incentives to our employees. ~~As a result of the failure to remain current in our reporting requirements with the SEC, we are not currently eligible to use Form S-8 registration statements.~~

Stock Plans

We had activity related to equity awards from the following plans in ~~2018, 2017,~~2021, 2020, and ~~2016:~~2019:

2020 Omnibus Incentive Plan:

In May 2020, our stockholders approved The Kraft Heinz Company 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”), which was adopted by our Board of Directors (“Board”) in March 2020. The 2020 Omnibus Plan became effective March 2, 2020 (the “Plan Effective Date”) and will expire on the tenth anniversary of the Plan Effective Date. The 2020 Omnibus Plan authorizes the issuance of up to 36 million shares of our common stock for awards to employees, non-employee directors, and other key personnel. The 2020 Omnibus Plan provides for the grant of options, stock appreciation rights, restricted stock, RSUs, deferred stock, performance awards, other stock-based awards, and cash-based awards. Equity awards granted under the 2020 Omnibus Plan include awards that vest in full at the end of a three-year period as well as awards that vest in annual installments over three or four years beginning on the second anniversary of the original grant date. Non-qualified stock options have a maximum exercise term of 10 years from the date of the grant. As of the Plan Effective Date, awards will no longer be granted under The Kraft Heinz Company 2016 Omnibus Incentive Plan, the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan, Kraft Foods Group, Inc. 2012 Performance Incentive Plan, or any other equity plans other than the 2020 Omnibus Plan.

2016 Omnibus Incentive Plan:

In April 2016, our ~~Board of Directors~~stockholders approved ~~the~~The Kraft Heinz Company 2016 Omnibus Incentive Plan (“2016 Omnibus Plan”), which was adopted by our Board in February 2016. The 2016 Omnibus Plan authorized grants of up to 18 million shares of our common stock pursuant to options, stock appreciation rights, RSUs, deferred stock, performance awards, investment rights, other stock-based awards, and cash-based awards. ~~This plan authorizes the issuance of up to 18 million shares of our common stock.~~ Equity awards granted under the 2016 Omnibus Plan prior to 2019 generally ~~have~~vest in full at the end of a five-year ~~cliff~~period. Equity awards granted under the 2016 Omnibus Plan in 2019 include awards that vest ~~period,~~in full at the end of three and ~~non-qualified~~five-year periods as well as awards that become exercisable in annual installments over three to four years beginning on the second anniversary of the original grant date. Non-qualified stock options have a maximum exercise term of 10 years. Equity awards granted under the 2016 Omnibus Plan since inception include non-qualified stock options, RSUs, and PSUs.

2013 Omnibus Incentive Plan:

Prior to approval of the 2016 Omnibus Plan, we issued non-qualified stock options to select employees under the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan (“2013 Omnibus Plan”). As a result of the 2015 Merger, each outstanding Heinz stock option was converted into 0.443332 of a Kraft Heinz stock option. Following this conversion, the 2013 Omnibus Plan authorized the issuance of up to 17,555,947 shares of our common stock. Non-qualified stock options awarded under the 2013 Omnibus Plan ~~have~~vest in full at the end of a five-year ~~cliff vest~~ period and have a maximum exercise term of 10 years. These non-qualified stock options ~~will continue to vest~~have vested and become exercisable in accordance with the terms and conditions of the 2013 Omnibus Plan and the relevant award agreements.

Kraft 2012 Performance Incentive Plan:

Prior to the 2015 Merger, Kraft issued equity-based awards, including stock options and RSUs, under ~~its~~the Kraft Foods Group, Inc. 2012 Performance Incentive ~~Plan.~~Plan (“2012 Performance Incentive Plan”). As a result of the 2015 Merger, each outstanding Kraft stock option was converted into an option to purchase a number of shares of our common stock based upon an option adjustment ratio, and each outstanding Kraft RSU was converted into ~~one~~1 Kraft Heinz RSU. These options generally become exercisable in 3 annual installments beginning on the first anniversary of the original grant date, and have a maximum exercise term of 10 years. These RSUs generally vest in full on the third anniversary of the original grant date. In accordance with the terms of the 2012 Performance Incentive Plan, vesting generally accelerated for holders of Kraft awards who were terminated without cause within 2 years of the 2015 Merger Date. These Kraft Heinz equity awards ~~will continue to vest~~have vested and become exercisable in accordance with the terms and conditions that were applicable immediately prior to the completion of the 2015 Merger. These options generally become exercisable in three annual installments beginning on the first anniversary of the original grant date, and have a maximum exercise term of 10 years. RSUs generally cliff vest on the third anniversary of the original grant date. In accordance with the terms of the 2012 Performance Incentive Plan, vesting generally accelerates for holders of Kraft awards who are terminated without cause within two years of the 2015 Merger Date.

In addition, prior to the 2015 Merger, Kraft issued performance-based, long-term incentive awards (“Kraft Performance Shares”), which vested based on varying performance, market, and service conditions. In connection with the 2015 Merger, all outstanding Kraft Performance Shares were converted into cash awards, payable in ~~two~~2 installments: (i) a 2015 pro-rata payment based upon the portion of the Kraft Performance Share cycle completed prior to the 2015 Merger and (ii) the remaining value of the award to be paid on the earlier of the first anniversary of the closing of the 2015 Merger and a participant's termination without cause.

Stock Options

We use the Black-Scholes model to estimate the fair value of stock option grants. Our weighted average Black-Scholes fair value assumptions were:


	December 29, 2018			December 30, 2017			December 31, 2016				December 25, 2021			December 26, 2020			December 28, 2019
Risk-free interest rate	2.75		%	2.25		%	1.63		%	Risk-free interest rate	1.03		%	0.45		%	1.46		%
Expected term	7.5 years			7.5 years			7.5 years			Expected term	6.5 years			6.5 years			6.5 years
Expected volatility	21.3		%	19.6		%	22.0		%	Expected volatility	32.1		%	33.6		%	31.2		%
Expected dividend yield	3.6		%	2.8		%	3.1		%	Expected dividend yield	4.6		%	5.7		%	5.3		%
Weighted average grant date fair value per share	$	10.26		$	14.24		$	12.48		Weighted average grant date fair value per share	$	6.63		$	4.77		$	4.11

The risk-free interest rate represented the constant maturity U.S. Treasury rate in effect at the grant date, with a remaining term equal to the expected life of the options. The expected life is the period over which our employees are expected to hold their options. Due to the lack of historical data, we calculated expected life using the ~~Safe Harbor method, which uses the~~ weighted average vesting period and the contractual term of the options. ~~In 2018, we~~We estimated volatility using a blended volatility approach of term-matched historical volatility from our daily stock prices and weighted average implied volatility. In 2017 and 2016, we estimated volatility using a blended approach of implied volatility and peer volatility. We calculated peer volatility as the average of the term-matched, leverage-adjusted historical volatilities of Colgate-Palmolive Co., The Coca-Cola Company, Mondelēz International, Altria Group, Inc., PepsiCo, Inc., and Unilever plc. We estimated the expected dividend yield using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded.

Our stock option activity and related information was:


	Number of Stock Options	Weighted Average Exercise Price (per share)		Aggregate Intrinsic Value (in millions)		Average Remaining Contractual Term
Outstanding at December 26, 2020	13,479,668	$	43.71
Granted	1,021,901	37.05
Forfeited	(733,998)	53.02
Exercised	(1,989,503)	26.63
Outstanding at December 25, 2021	11,778,068	45.43		$	36	4 years
Exercisable at December 25, 2021	7,369,931	45.04		21		3 years

Number of Stock Options Weighted Average Exercise Price
(per share) Aggregate Intrinsic Value
(in millions) Average Remaining Contractual Term
Outstanding at December 30, 2017 19,289,564
$ 41.63

Granted 2,143,730
64.37

Forfeited (1,136,924 ) 61.10

Exercised (2,036,405 ) 27.68

Outstanding at December 29, 2018 18,259,965
44.64
$ 168
6 years
Exercisable at December 29, 2018 10,492,048
33.48
124
4 years

The aggregate intrinsic value of stock options exercised during the period was ~~$67~~$23 millionin ~~2018, $124~~2021, $24 million in ~~2017,~~2020, and ~~$186~~$10 million in ~~2016.~~2019.

Cash received from options exercised was ~~$56~~$53 million in ~~2018, $66~~2021, $85 million in ~~2017,~~2020, and ~~$140~~$17 million in ~~2016.~~2019. The tax benefit realized from stock options exercised was ~~$23~~$12 million in ~~2018, $44~~2021, $16 million in ~~2017,~~2020, and ~~$68~~$18 million in ~~2016.~~2019.

Our unvested stock options and related information was:


						Number of Stock Options	Weighted Average Grant Date Fair Value (per share)
	Number of Stock Options		Weighted Average Grant Date Fair Value (per share)
Unvested options at December 30, 2017	11,827,142		$	8.36
Unvested options at December 26, 2020					Unvested options at December 26, 2020	4,919,593	$	8.37
Granted	2,143,730		10.26		Granted	1,021,901	6.63
Forfeited					Forfeited	(93,249)	5.95
Vested	(5,135,897	)	5.99		Vested	(1,440,108)	9.89
Forfeited	(1,067,058	)	10.45
Unvested options at December 29, 2018	7,767,917		10.16
Unvested options at December 25, 2021					Unvested options at December 25, 2021	4,408,137	7.52

Restricted Stock Units

RSUs represent a right to receive ~~one~~1 share or the value of one share upon the terms and conditions set forth in the applicable plan and ~~the applicable~~ award agreement.

We used the stock price on the grant date to estimate the fair value of our RSUs. Certain of our RSUs are not ~~dividend-eligible.~~dividend eligible. We discounted the fair value of these RSUs based on the dividend yield. Dividend yield was estimated using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded. The grant date fair value of RSUs is amortized to expense over the vesting period.

The weighted average grant date fair value per share of our RSUs granted during the year was ~~$58.59~~$36.36 in ~~2018, $91.25~~2021, $29.27 in ~~2017,~~2020, and ~~$77.53~~$25.77 in ~~2016. Our expected dividend yield was 3.31% in 2018.~~2019. All RSUs granted in ~~2017~~2021, 2020, and ~~2016~~2019 were ~~dividend-eligible.~~dividend eligible.

Our RSU activity and related information was:


						Number of Units	Weighted Average Grant Date Fair Value (per share)
	Number of Units		Weighted Average Grant Date Fair Value (per share)
Outstanding at December 30, 2017	1,284,262		$	81.91
Outstanding at December 26, 2020					Outstanding at December 26, 2020	14,235,922	$	31.32
Granted	1,443,088		58.59		Granted	3,370,438	36.36
Forfeited	(253,249	)	77.42		Forfeited	(1,564,027)	31.06
Vested	(135,143	)	73.57		Vested	(3,565,943)	30.03
Outstanding at December 29, 2018	2,338,958		68.49
Outstanding at December 25, 2021					Outstanding at December 25, 2021	12,476,390	33.08

Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total
Balance as of January 3, 2016 (As Restated) $ (1,654 ) $ 985
$ 53
$ (616 )
Foreign currency translation adjustments (985 ) —
—
(985 )
Net deferred gains/(losses) on net investment hedges 226
—
—
226
Net deferred gains/(losses) on cash flow hedges —
—
46
46
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) —
—
(87 ) (87 )
Net postemployment benefit gains/(losses) arising during the period —
(9 ) —
(9 )
Net postemployment benefit losses/(gains) reclassified to net income/(loss) —
(204 ) —
(204 )
Total other comprehensive income/(loss) (759 ) (213 ) (41 ) (1,013 )
Balance as of December 31, 2016 (As Restated) (2,413 ) 772
12
(1,629 )
Foreign currency translation adjustments 1,179
—
—
1,179
Net deferred gains/(losses) on net investment hedges (353 ) —
—
(353 )
Net deferred gains/(losses) on cash flow hedges —
—
(113 ) (113 )
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) —
—
85
85
Net postemployment benefit gains/(losses) arising during the period —
86
—
86
Net postemployment benefit losses/(gains) reclassified to net income/(loss) —
(309 ) —
(309 )
Total other comprehensive income/(loss) 826
(223 ) (28 ) 575
Balance as of December 30, 2017 (As Restated) (1,587 ) 549
(16 ) (1,054 )
Foreign currency translation adjustments (1,173 ) —
—
(1,173 )
Net deferred gains/(losses) on net investment hedges 284
—
—
284
Amounts excluded from the effectiveness assessment of net investment hedges 7
—
—
7
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) (7 ) —
—
(7 )
Net deferred gains/(losses) on cash flow hedges —
—
99
99
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
2
2
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) —
—
(44 ) (44 )
Net postemployment benefit gains/(losses) arising during the period —
61
—
61
Net postemployment benefit losses/(gains) reclassified to net income/(loss) —
(118 ) —
(118 )
Total other comprehensive income/(loss) (889 ) (57 ) 57
(889 )
Balance as of December 29, 2018 $ (2,476 ) $ 492
$ 41
$ (1,943 )

~~Reclassification of net postemployment benefit losses/(gains) included amounts reclassified to net income and amounts reclassified into inventory (consistent with our capitalization policy).~~

The gross amount and related tax benefit/(expense) recorded in, and associated with, each component of other comprehensive income/(loss) were as follows (in millions):


	December 25, 2021						December 26, 2020						December 28, 2019
	Before Tax Amount		Tax		Net of Tax Amount		Before Tax Amount		Tax		Net of Tax Amount		Before Tax Amount		Tax		Net of Tax Amount
Foreign currency translation adjustments	$	(242)	$	—	$	(242)	$	324	$	—	$	324	$	239	$	—	$	239
Net deferred gains/(losses) on net investment hedges	220		(51)		169		(426)		105		(321)		(2)		3		1
Amounts excluded from the effectiveness assessment of net investment hedges	46		(11)		35		28		(2)		26		29		(7)		22
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)	(38)		9		(29)		(23)		6		(17)		(23)		7		(16)
Net deferred gains/(losses) on cash flow hedges	(152)		61		(91)		209		(65)		144		(16)		6		(10)
Amounts excluded from the effectiveness assessment of cash flow hedges	28		(1)		27		24		—		24		30		(1)		29
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)	138		(70)		68		(175)		59		(116)		(48)		7		(41)
Net actuarial gains/(losses) arising during the period	308		(76)		232		(30)		3		(27)		(65)		(5)		(70)
Prior service credits/(costs) arising during the period	—		—		—		—		—		—		1		—		1
Net postemployment benefit losses/(gains) reclassified to net income/(loss)	(32)		6		(26)		(158)		40		(118)		(312)		78		(234)

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount
Foreign currency translation adjustments $ (1,173 ) $ —
$ (1,173 ) $ 1,179
$ —
$ 1,179
$ (985 ) $ —
$ (985 )
Net deferred gains/(losses) on net investment hedges 377
(93 ) 284
(632 ) 279
(353 ) 426
(200 ) 226
Amounts excluded from the effectiveness assessment of net investment hedges 10
(3 ) 7
—
—
—
—
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) (10 ) 3
(7 ) —
—
—
—
—
—
Net deferred gains/(losses) on cash flow hedges 116
(17 ) 99
(123 ) 10
(113 ) 40
6
46
Amounts excluded from the effectiveness assessment of cash flow hedges 2
—
2
—
—
—
—
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (45 ) 1
(44 ) 85
—
85
(81 ) (6 ) (87 )
Net actuarial gains/(losses) arising during the period 74
(16 ) 58
116
(47 ) 69
(78 ) 38
(40 )
Prior service credits/(costs) arising during the period 6
(3 ) 3
25
(8 ) 17
51
(20 ) 31
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (156 ) 38
(118 ) (502 ) 193
(309 ) (331 ) 127
(204 )

The amounts reclassified from accumulated other comprehensive income/(losses) were as follows (in millions):


Accumulated Other Comprehensive Income/(Losses) Component	Reclassified from Accumulated Other Comprehensive Income/(Losses) to Net Income/(Loss)						Affected Line Item in the Statements of Income
	December 25, 2021		December 26, 2020		December 28, 2019
Losses/(gains) on net investment hedges:
Foreign exchange contracts(a)	$	—	$	—	$	6	Other expense/(income)
Foreign exchange contracts(b)	(2)		2		1		Interest expense
Cross-currency contracts(b)	(36)		(25)		(30)		Interest expense
Losses/(gains) on cash flow hedges:
Foreign exchange contracts(c)	1		—		—		Net sales
Foreign exchange contracts(c)	49		(19)		(23)		Cost of products sold
Foreign exchange contracts(c)	1		—		—		SG&A
Foreign exchange contracts(c)	—		—		22		Other expense/(income)
Cross-currency contracts(c)	64		(169)		(51)		Other expense/(income)
Cross-currency contracts(c)	22		11		—		Interest expense
Interest rate contracts(d)	1		2		4		Interest expense
Losses/(gains) on hedges before income taxes	100		(198)		(71)
Losses/(gains) on hedges, income taxes	(61)		65		14
Losses/(gains) on hedges	$	39	$	(133)	$	(57)

Losses/(gains) on postemployment benefits:
Amortization of unrecognized losses/(gains)(e)	$	(13)	$	(12)	$	(7)
Amortization of prior service costs/(credits)(e)	(8)		(122)		(306)
Settlement and curtailment losses/(gains)(e)	(11)		(24)		—
Other losses/(gains) on postemployment benefits	—		—		1
Losses/(gains) on postemployment benefits before income taxes	(32)		(158)		(312)
Losses/(gains) on postemployment benefits, income taxes	6		40		78
Losses/(gains) on postemployment benefits	$	(26)	$	(118)	$	(234)

Accumulated Other Comprehensive Income/(Losses) Component Reclassified from Accumulated Other Comprehensive Income/(Losses) to Net Income/(Loss) Affected Line Item in the Statements of Income
As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Losses/(gains) on net investment hedges:
Foreign exchange contracts^(a)
$ 3
$ —
$ —
Interest expense
Cross-currency contracts^(a)
(13 ) —
—
Interest expense
Losses/(gains) on cash flow hedges:
Foreign exchange contracts^(b)
—
—
(6 ) Net sales
Foreign exchange contracts^(b)
4
—
(41 ) Cost of products sold
Foreign exchange contracts^(b)
(59 ) 81
(38 ) Other expense/(income), net
Cross-currency contracts^(a)
6
—
—
Other expense/(income), net
Interest rate contracts^(c)
4
4
4
Interest expense
Losses/(gains) on hedges before income taxes (55 ) 85
(81 )
Losses/(gains) on hedges, income taxes 4
—
(6 )
Losses/(gains) on hedges $ (51 ) $ 85
$ (87 )

Losses/(gains) on postemployment benefits:
Amortization of unrecognized losses/(gains) $ 2
$ 1
$ (1 ) (d)
Amortization of prior service costs/(credits) (311 ) (328 ) (355 ) (d)
Settlement and curtailment losses/(gains) 153
(175 ) 25
(d)
Losses/(gains) on postemployment benefits before income taxes (156 ) (502 ) (331 )
Losses/(gains) on postemployment benefits, income taxes 38
193
127

Losses/(gains) on postemployment benefits $ (118 ) $ (309 ) $ (204 )
(a) Represents the reclassification of hedge losses/(gains) resulting from the complete or substantially complete liquidation of our investment in the underlying foreign operations.


~~(a)~~	~~Represents recognition of the excluded component in net income/(loss).~~


~~(b)~~	~~Includes amortization of the excluded component and the effective portion of the related hedges.~~


~~(c)~~	~~Represents amortization of realized hedge losses that were deferred into accumulated other comprehensive income/(losses) through the maturity of the related long-term debt instruments.~~

~~(d)~~

~~These components are included in the computation of net periodic postemployment benefit costs. See Note 13,~~ ~~Postemployment Benefits, for additional information.~~

(b) Represents recognition of the excluded component in net income/(loss).

(d) Represents amortization of realized hedge losses that were deferred into accumulated other comprehensive income/(losses) through the maturity of the related long-term debt instruments.

(e) These components are included in the computation of net periodic postemployment benefit costs. See Note 12, Postemployment Benefits, for additional information.

In this note we have excluded activity and balances related to noncontrolling interest due to ~~its~~their insignificance. This activity was primarily related to foreign currency translation adjustments.

Note ~~16. Venezuela - Foreign Currency and Inflation~~

We have a subsidiary in Venezuela that manufactures and sells a variety of products, primarily in the condiments and sauces and infant and nutrition categories. We apply highly inflationary accounting to the results of our Venezuelan subsidiary and include these results in our consolidated financial statements. Under highly inflationary accounting, the functional currency of our Venezuelan subsidiary is the U.S. dollar (the reporting currency of Kraft Heinz), although the majority of its transactions are in Venezuelan bolivars. As a result, we must revalue the results of our Venezuelan subsidiary to U.S. dollars. We revalue the income statement using daily weighted average DICOM (as defined below) rates, and we revalue the bolivar denominated monetary assets and liabilities at the period-end DICOM spot rate. The resulting revaluation gains and losses are recorded in current net income/(loss), rather than accumulated other comprehensive income/(losses). These gains and losses are classified within other expense/(income), net as nonmonetary currency devaluation on our consolidated statements of income.

In February 2018, the Venezuelan government eliminated the official exchange rate, which was available through the Sistema de Divisa Protegida (“DIPRO”) for purchases and sales of certain essential items, including food products. At December 30, 2017, we had outstanding invoice reimbursement requests of $26 million related to the purchase of ingredients and packaging materials for the years 2012 through 2015. Following the elimination of this preferential rate, we determined that these outstanding requests, which were approved by the Venezuelan government, were no longer collectible. There was no impact on our consolidated statements of income for 2018.

Following elimination of the DIPRO rate, the Sistema de Divisa Complementaria (“DICOM”) is the only foreign currency exchange mechanism legally available to us for converting Venezuelan bolivars to U.S. dollars. As of December 29, 2018, we believe the DICOM rate is the most appropriate legally available rate at which to translate the results of our Venezuelan subsidiary. We continue to monitor the DICOM rate, and the nonmonetary assets supported by the underlying operations in Venezuela, for impairment.

The auction-based DICOM system was temporarily frozen in September 2017 and reopened in February 2018. The last published DICOM rate before the auction freeze was BsF3,345 per U.S. dollar compared to BsF25,000 per U.S. dollar upon reopening. In August 2018, the Venezuelan government changed the unit for measuring bolivars from the bolivar fuerte (“BsF”) to the bolivar soberano (“BsS”). The conversion ratio is BsF100,000 to BsS1. Upon converting to the bolivar soberano measurement unit, the Venezuelan government further devalued the currency. On August 20, 2018, the published DICOM rate was BsF6,000,000 (BsS60.00) per U.S. dollar compared to approximately BsF249,000 (BsS2.49) per U.S. dollar immediately preceding the conversion to BsS.

The DICOM rate at December 29, 2018 was BsS638.18 per U.S. dollar compared to BsS0.03 at December 30, 2017. We remeasured the bolivar denominated assets and liabilities of our Venezuelan subsidiary at December 29, 2018 using the DICOM spot rate of BsS638.18 per U.S. dollar. We remeasured the income statements of our Venezuelan subsidiary using a weighted average rate of BsS25.06 in 2018, BsS0.02 in 2017, and BsS0.01 in 2016. Remeasurements of the monetary assets and liabilities and operating results of our Venezuelan subsidiary at DICOM rates resulted in nonmonetary currency devaluation losses of $146 million in 2018, $36 million in 2017, and $24 million in 2016. These losses were recorded in other expense/(income), net in the consolidated statements of income.

Additionally, in the second quarter of 2016, we assessed the nonmonetary assets of our Venezuelan subsidiary for impairment, resulting in a $53 million loss to write down property, plant and equipment, net, and prepaid spare parts, which was recorded within cost of products sold in the consolidated statement of income in 2016.

We did not obtain any U.S. dollars at DICOM rates during 2018. In addition to DICOM, there is an unofficial market for obtaining U.S. dollars with Venezuelan bolivars. The exact exchange rate is widely debated but is generally accepted to be substantially higher than the latest published DICOM rate. We have not transacted at any unofficial market rates and have no plans to transact at unofficial market rates in the foreseeable future.

Our Venezuelan subsidiary obtains U.S. dollars through exports and royalty payments. These U.S. dollars are primarily used for purchases of tomato paste and spare parts for manufacturing, as well as a limited amount of other operating costs. As of December 29, 2018, our Venezuelan subsidiary has sufficient U.S. dollars to fund these operational needs in the foreseeable future. However, further deterioration of the economic environment or regulation changes could jeopardize our export business. Our Venezuelan subsidiary has increasingly sourced production inputs locally, including tomato paste and sugar, in order to reduce reliance on U.S. dollars, which we expect to continue in the foreseeable future.

Our results of operations in Venezuela reflect a controlled subsidiary. We continue to have sufficient currency liquidity and pricing flexibility to control our operations. However, the continuing economic uncertainty, strict labor laws, and evolving government controls over imports, prices, currency exchange, and payments present a challenging operating environment. Increased restrictions imposed by the Venezuelan government or further deterioration of the economic environment could impact our ability to control our Venezuelan operations and could lead us to deconsolidate our Venezuelan subsidiary in the future. We currently do not expect to make any new investments or contributions into Venezuela.

~~Note 17.~~15. Financing Arrangements

We have utilized accounts receivable securitization and factoring programs (the “Programs”) globally for our working capital needs and to provide efficient liquidity. During 2018, we had Programs in place in various countries across the globe. In the second quarter of 2018, we unwound our U.S. securitization program, which represented the majority of our Programs, using proceeds from the issuance of long-term debt in June 2018. As of December 29, 2018, we have unwound all of our Programs.

We operated the Programs such that we generally utilized the majority of the available aggregate cash consideration limits. We accounted for transfers of receivables pursuant to the Programs as a sale and removed them from our consolidated balance sheets. Under the Programs, we generally received cash consideration up to a certain limit and recorded a non-cash exchange for sold receivables for the remainder of the purchase price. We maintained a “beneficial interest,” or a right to collect cash, in the sold receivables. Cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized in these Programs) are classified as investing activities and presented as cash receipts on sold receivables on our consolidated statements of cash flows.

The carrying value of trade receivables removed from our consolidated balance sheets in connection with the Programs was $1.0 billion at December 30, 2017. In exchange for the sale of trade receivables, we received cash of $673 million at December 30, 2017 and recorded sold receivables of $353 million at December 30, 2017. There were no such balances at December 29, 2018. The carrying value of sold receivables approximated the fair value at December 30, 2017.

~~We acted as servicer for certain of the Programs. We did not record any related servicing assets or liabilities as of December 30, 2017 because they were not material to the financial statements.~~

Our U.S. securitization program utilized a bankruptcy-remote special-purpose entity (“SPE”). The SPE was wholly-owned by a subsidiary of Kraft Heinz, and its sole business consisted of the purchase or acceptance, through capital contributions, of receivables and related assets from a Kraft Heinz subsidiary and the subsequent transfer of such receivables and related assets to a bank. Although the SPE is included in our consolidated financial statements, it was a separate legal entity with separate creditors who were entitled, upon its liquidation in the second quarter of 2018, to be satisfied out of the SPE's assets prior to any assets or value in the SPE becoming available to Kraft Heinz or its subsidiaries.

~~Additionally, we~~ enter into various ~~structured payable and~~ product financing arrangements to facilitate supply from our vendors. Balance sheet classification is based on the nature of the ~~agreements. For certain arrangements,~~arrangements. We have concluded that our obligations to our suppliers, including amounts due and scheduled payment terms, are impacted by their participation in the program and therefore we classify amounts outstanding within other current liabilities on our consolidated balance sheets. We had approximately ~~$267~~$215 million at December 25, 2021 and approximately $236 million at December 26, 2020 on our consolidated balance sheets ~~at December 29, 2018 and approximately $268 million at December 30, 2017~~ related to these arrangements.

Transfers of Financial Assets:

Since 2020, we have had a nonrecourse accounts receivable factoring program whereby certain eligible receivables are sold to third party financial institutions in exchange for cash. The program provides us with an additional means for managing liquidity. Under the terms of the arrangement, we act as the collecting agent on behalf of the financial institutions to collect amounts due from customers for the receivables sold. We account for the transfer of receivables as a true sale at the point control is transferred through derecognition of the receivable on our consolidated balance sheet. Receivables sold under this accounts receivable factoring program were approximately $50 million during 2020. No receivables were sold under this accounts receivable factoring program during 2021, and there were no amounts outstanding as of December 25, 2021 or December 26, 2020. The incremental costs of factoring receivables under this arrangement were insignificant for the year ended December 26, 2020. The proceeds from the sales of receivables are included in cash from operating activities in the consolidated statement of cash flows.

Note ~~18.~~16. Commitments and Contingencies

Legal Proceedings

We are involved in legal proceedings, claims, and governmental inquiries, inspections, or investigations (“Legal Matters”) arising in the ordinary course of our business. While we cannot predict with certainty the results of Legal Matters in which we are currently involved or may in the future be involved, we do not expect that the ultimate costs to resolve ~~any of~~ the Legal Matters that are currently pending will have a material adverse effect on our financial condition, or results of ~~operations.~~operations, or cash flows.

Class Actions and Stockholder Derivative Actions:

WeThe Kraft Heinz Company and certain of our current and former officers and directors are currently defendants in ~~three~~a consolidated securities class action ~~lawsuits filed in February, March, and April 2019. The first filed action,~~ ~~Hedick v. The Kraft Heinz Company, was filed on February 24, 2019 against the Company and three of its officers (the “Hedick Action”). The second filed action,~~ ~~Iron Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan v. The Kraft Heinz Company, was filed on March 15, 2019 against, among others, the Company and six of its current and former officers (the “Iron Workers Action”). The third filed action,~~ ~~Timber Hill LLC v. The Kraft Heinz Company~~, was filed on April 25, 2019 against, among others, the Company and six of its current and former officers and one of its directors (the “Timber Hill Action”). All of these securities class action lawsuits were filedlawsuit pending in the United States District Court for the Northern District of ~~Illinois. Another securities~~Illinois, Union Asset Management Holding AG, et al. v. The Kraft Heinz Company, et al. The consolidated amended class action ~~lawsuit,~~ ~~Walling v. Kraft Heinz Company~~,complaint, which was filed on ~~February 26, 2019 in the United States District Court for the Western District of Pennsylvania against, among others, the Company~~August 14, 2020 and ~~six~~also names 3G Capital, Inc. and several of its ~~current~~subsidiaries and ~~former officers (the “Walling Action”~~affiliates (“3G Entities”)~~. Plaintiff in the Walling Action filed a notice of voluntary dismissal of his complaint, without prejudice, on April 26, 2019.~~

Plaintiffs in these lawsuits purport to represent a class of all individuals and entities who purchased, sold, or otherwise acquired or disposed of publicly traded securities of the Company (including in the Timber Hill Action, the purchase of call options on Company common stock, the sale of put options on Company common stock, and the purchase of futures on the Company’s common stock) from May 4, 2017 through February 21, 2019, in the case of the Hedick Action and the Walling Action, and from July 6, 2015 through February 21, 2019, in the case of the Iron Workers Action and the Timber Hill Action. The complaints assert as defendants, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, based on allegedly materially false or misleading statements and omissions in public statements, press releases, investor presentations, earnings calls, Company documents, and ~~SEC~~Securities and Exchange Commission (“SEC”) filings regarding the Company’s business, financial results, and internal ~~controls.~~controls, and further alleges the 3G Entities engaged in insider trading and misappropriated the Company’s material, non-public information. The plaintiffs seek damages in an unspecified amount, attorneys’ fees, and other relief. The Company filed a motion to dismiss the consolidated amended class action complaint, which motion the court denied in an order dated August 11, 2021.

In addition, our Employee Benefits Administration Board and certain of ~~our~~The Kraft Heinz Company’s current and former officers and employees are currently defendants in ~~one~~an Employee Retirement Income Security Act (“ERISA”) class action lawsuit, Osborne v. Employee Benefits Administration Board of Kraft Heinz, et al., which ~~was filed on March 19, 2019~~is pending in the United States District Court for the ~~Western~~Northern District of ~~Pennsylvania.~~Illinois. Plaintiffs in the lawsuit purport to represent a class of current and former employees who were participants in and beneficiaries of various retirement plans which were co-invested in a commingled investment fund known as the Kraft Foods Savings Plan Master Trust (the “Master Trust”) during the period of May 4, 2017 through February 21, 2019. An amended complaint was filed on June 28, 2019. The amended complaint alleges violations of Section 502 of ~~the Employee Retirement Income Security Act (“ERISA”)~~ERISA based on alleged breaches of obligations as fiduciaries subject to ERISA by allowing the Master Trust to continue investing in our common ~~stock.~~stock, and alleges additional breaches of fiduciary duties by current and former officers for their purported failure to monitor Master Trust fiduciaries. The plaintiffs seek damages in an unspecified amount, attorneys’ fees, and other relief. The Company filed a motion to dismiss the amended complaint, which motion the court granted in an order dated August 23, 2021, before entering judgment in favor of the Company on September 14, 2021. The plaintiffs filed a notice of appeal on October 13, 2021. The parties subsequently filed a stipulation of voluntary dismissal with prejudice on December 7, 2021, and the appellate court dismissed the appeal with prejudice on that same date.

Certain of ~~our~~The Kraft Heinz Company’s current and former officers and directors ~~among others,~~and the 3G Entities are also ~~currently~~named as defendants in ~~five~~a stockholder derivative ~~actions:~~ ~~DeFabiis v. Hees~~ action, In re Kraft Heinz Shareholder Derivative Litigation, which had been previously consolidated in the United States District Court for the Western District of Pennsylvania, and is now pending in the United States District Court for the Northern District of Illinois. The court appointed lead plaintiffs and plaintiffs’ counsel on October 21, 2021, and lead plaintiffs filed a consolidated amended complaint on ~~April 16, 2019,~~ ~~Vladimir Gusinsky Revocable Trustv. Hees~~ ~~filed on May 8, 2019,~~ ~~Kailas v. Hees~~ ~~filed on May 13, 2019,~~ ~~Silverman v. Behring~~ ~~filed on May 15, 2019, and~~ ~~Green v. Behring~~ ~~filed on May 23, 2019, with the Company named as a nominal defendant. Plaintiffs, derivatively on behalf of the Company, assert~~November 22, 2021. The consolidated amended complaint asserts state law claims ~~under the common law and statutory law of Delaware~~ for alleged breaches of fiduciary duties and unjust enrichment, as well as federal claims for contribution for alleged violations of Sections 10(b) and ~~14(a)~~21D of the Exchange Act and Rule 10b-5 promulgated thereunder, based on allegedly materially false or misleading statements and omissions in public statements and SEC ~~filings.~~filings, and for implementing cost cutting measures that allegedly damaged the Company. The plaintiffs seek damages in an ~~unspecific~~unspecified amount, attorneys’ fees, and other relief. ~~All~~

Certain of ~~these~~The Kraft Heinz Company’s current and former officers and directors and the 3G Entities are also named as defendants in a consolidated stockholder derivative ~~actions were~~action, In re Kraft Heinz Company Derivative Litigation, which was filed in the ~~United States District~~Delaware Court ~~for~~of Chancery. The consolidated amended complaint, which was filed on April 27, 2020, alleges state law claims, contending that the ~~Western District~~3G Entities were controlling stockholders who owed fiduciary duties to the Company, and that they breached those duties by allegedly engaging in insider trading and misappropriating the Company’s material, non-public information. The complaint further alleges that certain of ~~Pennsylvania.~~The Kraft Heinz Company’s current and former officers and directors breached their fiduciary duties to the Company by purportedly making materially misleading statements and omissions regarding the Company’s financial performance and the impairment of its goodwill and intangible assets, and by supposedly approving or allowing the 3G Entities’ alleged insider trading. The complaint seeks relief against the defendants in the form of damages, disgorgement of all profits obtained from the alleged insider trading, contribution and indemnification, and an award of attorneys’ fees and costs. The defendants filed a motion to dismiss the consolidated amended complaint, which motion the court granted in an order dated December 15, 2021. The plaintiffs filed a notice of appeal on January 13, 2022.

We intend to vigorously defend against these lawsuits; however, we cannot reasonably estimate the potential range of loss, if any, due to the early stage of these proceedings.

~~Securities~~United States Government Investigations:

On September 3, 2021, The Kraft Heinz Company reached a settlement with the SEC, concluding and ~~Exchange Commission Investigation:~~

resolving in its entirety the previously disclosed SEC investigation. Under the terms of the settlement, we, without admitting or denying the findings in the administrative order issued by the SEC, agreed to pay a civil penalty of $62 million and to cease and desist from violations of specified provisions of the federal securities laws and rules promulgated thereunder. We recorded an accrual for the full amount of the penalty in the second quarter of 2021, which was reflected in other current liabilities in our condensed consolidated balance sheet at June 26, 2021 and in SG&A in our condensed consolidated statements of income, and paid the penalty in the third quarter of 2021. As previously disclosed, on February 21, 2019, we received a subpoena in October 2018 from the SEC related to our procurement area, specifically the accounting policies, procedures, and internal controls related to our procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to agreements with our suppliers. Following the receipt of this subpoena, we, together with external counsel and forensic accountants, and subsequently, under the oversight of the Audit Committee, conducted an internal investigation into our procurement area and related matters. Following our earnings release and investor call on February 21, 2019, when we announced the results of our interim assessment of goodwill and intangible asset impairments, the SEC requested additional information related to our financial reporting, internal controls, and disclosures, our assessment of goodwill and intangible asset impairments, and our communications with certain shareholders. It is our understanding that the United States Attorney’s Office for the Northern District of Illinois ~~also is~~(“USAO”) had been reviewing ~~this matter, working with~~ the SEC and receiving materials from it. We cannot predict the eventual scope, duration or outcome of any potential SEC legal action or other action or whether it could have a material impact on our financial condition, results of operations, or cash flow.matter. We have ~~been responsive to~~not received any contact from the ~~ongoing subpoenas and other document requests and will continue to cooperate fully with any governmental or regulatory inquiries or investigations.~~USAO within the past two years.

Other Commitments and Contingencies

As a result of our review of supplier contracts and related arrangements, we determined that the classification of the embedded lease element for certain contracts should have been classified as an operating lease instead of a capital lease. In addition, we identified certain arrangements that were improperly accounted for as embedded capital leases. Therefore, future obligations associated with operating leases and purchase obligations have been restated below. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for additional information related to the restatement and our review of supplier contracts and related arrangements.~~

~~Leases:~~

~~Rental expenses for leases of warehouse, production, and office facilities and equipment were $200 million in 2018, $244 million in 2017, and $198 million in 2016.~~

~~Minimum rental commitments under non-cancelable operating leases in effect at December 29, 2018 were (in millions):~~

2019 $ 185
2020 137
2021 105
2022 70
2023 49
Thereafter 148
Total $ 694

Purchase Obligations:

We have purchase obligations for materials, supplies, property, plant and equipment, and co-packing, storage, and distribution services based on projected needs to be utilized in the normal course of business. Other purchase obligations include commitments for marketing, advertising, capital expenditures, information technology, and professional services.

As of December ~~29, 2018,~~25, 2021, our take-or-pay purchase obligations were as follows (in millions):


2019	$	1,569
2020	757
2021	405
2022	287		2022	$	541
2023	210		2023	457
2024			2024	315
2025			2025	221
2026			2026	180
Thereafter	217		Thereafter	282
Total	$	3,445	Total	$	1,996

Redeemable Noncontrolling Interest:

In ~~2017,~~2016, we ~~commenced operations of~~entered into a joint venture with a minority partner to manufacture, package, market, and distribute ~~refrigerated soups and meal sides.~~food products. We ~~control~~controlled the operations and ~~include~~included this business in our consolidated results. Our minority partner ~~has~~had put options that, if it ~~chooses~~chose to exercise, would require us to purchase portions of its equity interest at a future date. These put options will become exercisable beginning in 2025 (on the eighth anniversary of the product launch date) at a price to be determined at that time based upon an independent third party valuation. The minority partner’s put options ~~are~~were reflected on our consolidated balance sheets as a redeemable noncontrolling interest. We ~~accrete~~previously accreted the redeemable noncontrolling interest to its estimated redemption value over the term of the put options. AtDuring 2020, we issued a notice of termination to our minority partner, indicating our intent to dissolve and liquidate the joint venture as provided for within our agreement. The joint venture was dissolved in December ~~29, 2018,~~2020. As a result of this dissolution, we ~~estimate~~recognized a pre-tax loss of approximately $26 million in other expense/(income) for the ~~redemption value to be approximately $35 million.~~year ended December 26, 2020.

Note ~~19.~~17. Debt

We may from time to time seek to retire or purchase our outstanding debt through redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately negotiated transactions, Rule 10b5-1 plans, or otherwise. Cash payments related to debt extinguishment are classified as cash outflows from financing activities on the consolidated statements of cash flows. Any gains or losses on extinguishment of debt are recognized in interest expense on the consolidated statements of income.

100

Borrowing Arrangements:

On July 6, 2015, together with Kraft Heinz Foods Company (“KHFC”), our 100% owned operating subsidiary, we entered into a credit agreement (as amended, the “Credit Agreement”), which ~~provides for a $4.0 billion~~provided an initial senior unsecured revolving ~~credit facility (the~~commitment in the aggregate amount of $4.0 billion (as amended, the “Senior Credit Facility”). In June 2018, we entered into an agreement ~~that became~~ effective on July 6, 2018 to extend the maturity date of our Senior Credit Facility from July 6, 2021 to July 6, 2023 and to ~~establish~~provide a $400 million euro equivalent swing line facility, which is available under the initial revolving commitment of $4.0 billion, ~~revolving credit facility limit~~ for short-term loans denominated in euros on a same-day basis. In March 2020, we entered into an extension letter agreement (the “2020 Extension Agreement”), which extends the maturity date of $3.9 billion under the Senior Credit Facility from July 6, 2023 to July 6, 2024. The revolving commitments of each lender that did not agree to the 2020 Extension Agreement continue to terminate on July 6, 2023. On October 9, 2020, we entered into a commitment increase amendment (the “Amendment”) to the Credit Agreement, which provides for incremental revolving commitments by 2 additional lenders in the amount of $50 million each, or $100 million in aggregate. Following the execution of the Amendment, the Senior Credit Facility provides for a revolving commitment of $4.1 billion through July 6, 2023 and $4.0 billion through July 6, 2024. On April 9, 2021, we entered into another extension letter agreement (the “2021 Extension Agreement”), which extends the maturity date of $4.0 billion under the Senior Credit Facility from July 6, 2024 to July 6, 2025.

In the first quarter of 2020, as a precautionary measure to preserve financial flexibility in light of the uncertainty in the global economy resulting from the COVID-19 pandemic, we borrowed $4.0 billion under our Senior Credit Facility. We repaid the full $4.0 billion during the second quarter of 2020. No amounts were drawn on our Senior Credit Facility at December ~~29, 2018,~~25, 2021, at December ~~30, 2017,~~26, 2020, or during the years ended December ~~29, 2018, December 30, 2017,~~25, 2021 and December ~~31, 2016.~~28, 2019.

The ~~Senior~~ Credit ~~Facility~~Agreement includes a $1.0 billion sub-limit for borrowings in alternative currencies (i.e., euro, British pound sterling, Canadian dollars, or other lawful currencies readily available and freely transferable and convertible into U.S. dollars), as well as a letter of credit sub-facility of up to $300 million. Subject to certain conditions, we may increase the amount of revolving commitments and/or add ~~additional~~ tranches of term loans in a combined aggregate amount of up to ~~$1.0 billion.~~$900 million.

Any committed borrowings under the Senior Credit Facility bear interest at a variable annual rate based on LIBOR/EURIBOR/CDOR loans or an alternate base rate/Canadian prime rate, in each case subject to an applicable margin based upon the long-term senior unsecured, non-credit enhanced debt rating assigned to us. The borrowings under the Senior Credit Facility have interest rates based on, at our election, base rate, LIBOR, EURIBOR, CDOR, or Canadian prime rate plus a spread ranging from 87.5 to 175 basis points for LIBOR, EURIBOR, and CDOR loans, and 0 to 75 basis points for base rate or Canadian prime rate loans.

The Senior Credit Facility contains representations, warranties, and covenants that are typical for these types of facilities and could, upon the occurrence of certain events of default, restrict our ability to access our Senior Credit Facility. ~~Our Senior~~The Credit ~~Facility~~Agreement requires us to maintain a minimum shareholders’ equity (excluding accumulated other comprehensive income/(losses)) of at least $35 billion. We were in compliance with ~~all financial covenants during the year ended~~this covenant as of December ~~29, 2018.~~

However, as previously disclosed, on March 22, 2019, we entered into a Waiver and Consent No. 1 (the “Original Waiver”) with respect to the Senior Credit Facility, pursuant to which the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, granted a temporary waiver of compliance by us with respect to the requirement to furnish the lenders a copy of the consolidated financial statements for our fiscal year ended December 29, 2018. Pursuant to the Original Waiver, we were required to provide consolidated financial statements no later than May 14, 2019. Due to additional delays in our financial reporting, on May 10, 2019, we entered into a Waiver and Consent No. 2 (the “Second Waiver”) with respect to the Senior Credit Facility, pursuant to which the lenders, as party to the Senior Credit Facility, and JPMorgan Chase Bank, N.A., as administrative agent, granted a temporary waiver of compliance by us with respect to the requirements to furnish the lenders copies of the consolidated financial statements for our fiscal year ended December 29, 2018 and for the fiscal quarter ended March 30, 2019. Pursuant to the Second Waiver and in order to remedy our noncompliance, we are required to provide consolidated financial statements for our fiscal year ended December 29, 2018 no later than June 28, 2019 and for our fiscal quarter ended March 30, 2019 no later than July 31, 2019. If we had not obtained these waivers, we would not have been able to access our Senior Credit Facility.25, 2021.

The obligations under the Credit Agreement are guaranteed by KHFC and The Kraft Heinz Company in the case of indebtedness and other liabilities of any subsidiary ~~borrower and by Kraft Heinz in the case of indebtedness and other liabilities of any subsidiary borrower and KHFC.~~borrower.

In ~~August 2017,~~March 2020, together with KHFC, we ~~repaid $600 million aggregate principal amount~~entered into an uncommitted revolving credit line agreement, which provides for borrowings up to $300 million. Each borrowing under this uncommitted revolving credit line agreement is due within six months of ~~our previously outstanding senior unsecured loan facility (the “Term Loan Facility”). Accordingly, there were~~the disbursement date. In March 2021, we amended the uncommitted revolving credit line agreement to extend the final maturity date of the agreement from June 9, 2021 to June 9, 2022. As of December 25, 2021, no amounts ~~outstanding~~had been drawn on ~~the Term Loan Facility at December 29, 2018 or December 30, 2017.~~this facility.

We ~~obtain~~have historically obtained funding through our U.S. and European commercial paper programs. ~~At December 29, 2018, we~~We had no commercial paper ~~outstanding. At~~outstanding at December ~~30, 2017, we had commercial paper outstanding of $448 million with a weighted average interest rate of 1.541%.~~25, 2021, at December 26, 2020, or during the years ended December 25, 2021 orDecember 26, 2020.

101

Long-Term Debt:

The following table summarizes our long-term debt obligations. ~~Long-term~~


	Priority (a)	Maturity Dates	Interest Rates (b)	Carrying Values
				December 25, 2021		December 26, 2020
				(in millions)
U.S. dollar notes(c)	Senior Notes	2022–2050	0.776%–7.125%	$	18,049	$	24,251
Euro notes(c)	Senior Notes	2023–2028	1.500%–2.250%	2,877		3,100
British pound sterling notes:
2030 Notes(d)	Senior Notes	February 18, 2030	6.250%	172		175
Other British pound sterling notes(c)	Senior Notes	July 1, 2027	4.125%	533		539
Other long-term debt	Various	2022–2035	0.500%–13.350%	42		41
Finance lease obligations				128		194
Total long-term debt				21,801		28,300
Current portion of long-term debt				740		230
Long-term debt, excluding current portion				$	21,061	$	28,070

(a) Priority of debt atindicates the order which debt would be paid if all debt obligations were due on the same day. Senior secured debt takes priority over unsecured debt. Senior debt has greater seniority than subordinated debt.

(b) Floating interest rates are stated as of December ~~30, 2017 reflects~~25, 2021.

(d) The 6.250% Pound Sterling Senior Secured Notes due February 18, 2030 (the “2030 Notes”) were issued by H.J. Heinz Finance UK Plc. Kraft Heinz and KHFC fully and unconditionally guarantee the ~~restatements described~~2030 Notes. The 2030 Notes now rank pari passu in ~~Note 2,~~ ~~Restatement~~right of ~~Previously Issued Consolidated Financial Statements~~.

Priority^(a)
Maturity Dates
Interest Rates ^(b)
Carrying Values
As Restated
December 29, 2018 December 30, 2017
(in millions)
U.S. dollar notes:
2025 Notes^(c)
Senior Secured Notes February 15, 2025 4.875% $ 1,193
$ 1,192
Other U.S. dollar notes^(d)(e)
Senior Notes 2019-2046 2.800% - 7.125% 25,551
25,165
Euro notes^(d)
Senior Notes 2023-2028 1.500% - 2.250% 2,899
3,038
Canadian dollar notes^(f)
Senior Notes July 6, 2020 2.700% - 3.128% 586
794
British pound sterling notes:
2030 Notes^(g)
Senior Secured Notes February 18, 2030 6.250% 165
176
Other British pound sterling notes^(d)
Senior Notes July 1, 2027 4.125% 504
536
Other long-term debt Various 2019-2035 0.800% - 5.500% 50
56
Capital lease obligations 199
84
Total long-term debt 31,147
31,041
Current portion of long-term debt 377
2,733
Long-term debt, excluding current portion $ 30,770
$ 28,308


~~(a)~~	Priority of debt indicates the order which debt would be paid if all debt obligations were due on the same day. Senior secured debt takes priority over unsecured debt. Senior debt has greater seniority than subordinated debt.


~~(b)~~	~~Floating interest rates are stated as of December 29, 2018.~~


~~(c)~~	The 4.875% Second Lien Senior Secured Notes due February 15, 2025 (the “2025 Notes”) are senior in right of payment of existing and future unsecured and subordinated indebtedness. Kraft Heinz fully and unconditionally guarantees these notes.


~~(d)~~	~~Kraft Heinz fully and unconditionally guarantees these notes, which were issued by KHFC.~~


~~(e)~~	~~Includes current year issuances (the “New Notes”) described below.~~


~~(f)~~	~~Kraft Heinz fully and unconditionally guarantees these notes, which were issued by Kraft Heinz Canada ULC (formerly Kraft Canada Inc.).~~

~~(g)~~

The 6.250% Pound Sterling Senior Secured Notes due February 18, 2030 (the “2030 Notes”) were issued by H.J. Heinz Finance UK Plc. Kraft Heinz and KHFC fully and unconditionally guarantee the 2030 Notes. This guarantee is secured and senior in right of payment of existing and future unsecured and subordinated indebtedness. Kraft Heinz became guarantor of the 2030 Notes in connection with the 2015 Merger. The 2030 Notes were previously only guaranteed by KHFC.

payment with all of our existing and future senior obligations. Kraft Heinz became guarantor of the 2030 Notes in connection with the 2015 Merger. The 2030 Notes were previously only guaranteed by KHFC.

Our long-term debt contains customary representations, covenants, and events of default. We were in compliance with all ~~financial~~such covenants ~~during the year ended~~at December ~~29, 2018.~~25, 2021.

Under our existing indentures, if we do not file required reports within specified time periods, the trustee or holders of at least 30% in the case of our Second Lien Senior Secured Notes due 2025 and 25% in the case of any other series of notes may deliver a notice of default for such series of notes which would commence the applicable cure period under such indenture. As of June 5, 2019, none of the cure periods under our existing indentures have been triggered in connection with our failure to comply with the respective reporting covenants set forth in such indentures. However, if a cure period is triggered under such indentures and we fail to file our annual and interim financial statements within such cure period, any outstanding notes issued thereunder would become callable.

At December ~~29, 2018,~~26, 2020, our long-term debt excluded amounts classified as held for sale. See Note 5, 4, Acquisitions and Divestitures, for additional information.

Long-term Debt Transactions:

The table below summarizes our aggregate principal amount of long-term debt outstanding, excluding financing leases, before and after our current year debt transactions, specifically tender offers, debt redemptions, open-market debt repurchases, and debt repayments (in millions):

102


	Aggregate Principal Amount Outstanding as of December 26, 2020		Tender Offers		Open Market Debt Repurchases		Debt Redemptions		Debt Repayments		Aggregate Principal Amount Outstanding as of December 25, 2021
3.500% senior notes due June 2022(c)	$	631	$	250	$	—	$	—	$	—	$	381
4.000% senior notes due June 2023(e)	447		—		—		447		—		—
3.950% senior notes due July 2025(a)(g)	1,609		812		—		797		—		—
3.000% senior notes due June 2026(a)(d)	2,000		88		36		—		—		1,876
6.375% senior notes due July 2028(b)	235		17		—		—		—		218
4.625% senior notes due January 2029(b)(c)(d)(f)(h)	1,100		701		30		—		—		369
3.750% senior notes due April 2030(b)(d)	1,000		254		3		—		—		743
4.250% senior notes due March 2031(c)	1,350		966		—		—		—		384
6.750% senior notes due March 2032(b)(c)	437		132		—		—		—		305
5.000% senior notes due July 2035(b)(c)(d)(f)(h)	1,000		285		29		—		—		686
6.875% senior notes due January 2039(b)(d)(f)(h)	878		29		38		—		—		811
7.125% senior notes due August 2039(b)(d)(h)	931		51		21		—		—		859
4.625% senior notes due October 2039(b)(f)(h)	500		101		1		—		—		398
6.500% senior notes due February 2040(b)(d)(f)(h)	788		39		43		—		—		706
5.000% senior notes due June 2042(b)(d)(f)(h)	2,000		334		134		—		—		1,532
5.200% senior notes due July 2045(d)(f)(h)	2,000		—		189		—		—		1,811
4.375% senior notes due June 2046(d)(f)(h)	3,000		—		214		—		—		2,786
Floating rate senior notes due February 2021(i)	111		—		—		—		111		—
3.125% senior notes due September 2021(i)	34		—		—		—		34		—
Other long-term debt(j)	7,842		—		—		—		—		7,606
Total	$	27,893	$	4,059	$	738	$	1,244	$	145	$	21,471

(a) Included in the Q1 2021 Tender Offer (defined below).

(b) Included in the Q2 2021 Tender Offers (defined below).

(d) Included in the Q2 2021 Repurchases (defined below).

(e) Included in the Q2 2021 Debt Redemption (defined below).

(f) Included in the Q3 2021 Repurchases (defined below).

(g) Included in the Q3 2021 Debt Redemption (defined below).

(h) Included in the Q4 2021 Repurchases (defined below).

(i) Repaid at maturity.

(j) Represents the aggregate principal amount of all of our long-term debt obligations, excluding finance leases, that were not impacted by current year debt transactions. Foreign-denominated long-term debt is reflected at the foreign currency exchange rate in effect at each period end.

103

At December ~~29, 2018,~~25, 2021, aggregate principal maturities of our long-term debt excluding ~~capital~~finance leases were (in millions):


2022	$	709
2023	852
2024	626
2025	3
2026	1,879
Thereafter	17,402

2019 $ 355
2020 2,992
2021 990
2022 3,508
2023 2,460
Thereafter 20,329
Tender Offers:

~~Debt Issuances:~~2021 Tender Offers

In February 2021, KHFC commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $1.0 billion, including principal and premium but excluding accrued and unpaid interest (the “Q1 2021 Maximum Tender Amount”), of its outstanding 3.950% senior notes due July 2025, 3.000% senior notes due June 2026, 4.000% senior notes due June 2023, and 3.500% senior notes due June 2022 (the “Q1 2021 Tender Offer”), listed in order of priority. Based on participation, KHFC elected to settle the Q1 2021 Tender Offer on the early settlement date, March 9, 2021. Since the aggregate purchase price of the senior notes validly tendered and not validly withdrawn as of the early tender time exceeded the Q1 2021 Maximum Tender Amount, we did not accept for purchase any of the 3.500% senior notes due June 2022 or the 4.000% senior notes due June 2023. The aggregate principal amount of senior notes validly tendered and accepted was approximately $900 million. Refer to the table above for the amount extinguished by senior note in the Q1 2021 Tender Offer.

In June ~~2018,~~2021, KHFC commenced cash tender offers to purchase up to the maximum combined aggregate purchase price of $2.8 billion, including principal and premium but excluding accrued and unpaid interest, of its 5.000% senior notes due June 2042, 5.000% senior notes due July 2035, 4.625% senior notes due January 2029, 4.625% senior notes due October 2039, 3.750% senior notes due April 2030, 6.500% senior notes due February 2040, 6.375% senior notes due July 2028, 6.750% senior notes due March 2032, 6.875% senior notes due January 2039, and 7.125% senior notes due August 2039 (the “Q2 2021 Tender Offers”), listed in order of priority. KHFC settled the Q2 2021 Tender Offers on June 14, 2021 and June 16, 2021. The aggregate principal amount of senior notes validly tendered and accepted was approximately $1.4 billion. Refer to the table above for the amount extinguished by senior note in the Q2 2021 Tender Offers.

In November 2021, KHFC commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $2.0 billion, including principal and premium but excluding accrued and unpaid interest (the “Q4 2021 Maximum Tender Amount”), of its 3.500% senior notes due June 2022, 4.625% senior notes due January 2029, 4.250% senior notes due March 2031, 6.750% senior notes due March 2032, 5.000% senior notes due July 2035, 6.500% senior notes due February 2040, 5.000% senior notes due June 2042, 5.200% senior notes due July 2045, 6.875% senior notes due January 2039, 7.125% senior notes due August 2039, 5.500% senior notes due June 2050, and 4.875% senior notes due October 2049 (the “Q4 2021 Tender Offer” and, together with the Q1 2021 Tender Offer and the Q2 2021 Tender Offers, the “2021 Tender Offers”), listed in order of priority. KHFC settled the Q4 2021 Tender Offer on December 6, 2021. Since the aggregate purchase price of the senior notes validly tendered and not validly withdrawn as of the early tender time exceeded the Q4 2021 Maximum Tender Amount, we did not accept for purchase any of the 6.500% senior notes due February 2040, 5.000% senior notes due June 2042, 5.200% senior notes due July 2045, 6.875% senior notes due January 2039, 7.125% senior notes due August 2039, 5.500% senior notes due June 2050, and 4.875% senior notes due October 2049. The aggregate principal amount of senior notes validly tendered and accepted was approximately $1.7 billion. Refer to the table above for the amount extinguished by senior note in the Q4 2021 Tender Offers.

Related to the 2021 Tender Offers, we recognized a loss on extinguishment of debt of $636 million within interest expense on the consolidated statement of income for the year ended December 25, 2021, which included a loss of $106 million in the first quarter of 2021 related to the Q1 2021 Tender Offer, a loss of $256 million in the second quarter of 2021 related to the Q2 2021 Tender Offers, and a loss of $274 million in the fourth quarter of 2021 related to the Q4 2021 Tender Offer. These losses primarily reflect the payment of early tender premiums and fees associated with the 2021 Tender Offers as well as the write-off of unamortized premiums, debt issuance costs, and discounts. Related to the 2021 Tender Offers, we recognized debt prepayment and extinguishment costs of $636 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflects the $636 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $24 million, unamortized debt issuance costs of $17 million, and unamortized discounts of $7 million.

104

2020 Tender Offer

In May 2020, KHFC commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $2.2 billion, excluding accrued and unpaid interest (the “2020 Maximum Tender Amount”), of its outstanding floating rate senior notes due February 2021, 3.500% senior notes due June 2022, 3.500% senior notes due July 2022, floating rate senior notes due August 2022, 4.000% senior notes due June 2023, 3.950% senior notes due July 2025, and 3.000% senior notes due June 2026 (the “2020 Tender Offer”), listed in order of priority. As a result of the 2020 Tender Offer, KHFC extinguished approximately $2.1 billion aggregate principal amounts of senior notes in the second quarter of 2020. None of the 3.000% senior notes due June 2026 were tendered based on the aggregate principal amount of senior notes validly tendered exceeding the 2020 Maximum Tender Amount. See Note 18, Debt, to our ~~100% owned operating subsidiary,~~consolidated financial statements in our Annual Report on Form 10-K for the year ended December 26, 2020 for additional information on the 2020 Tender Offer.

In connection with the 2020 Tender Offer, we recognized a loss on extinguishment of debt of $71 million within interest expense on the consolidated statement of income for the year ended December 26, 2020. This loss primarily reflects the payment of early tender premiums and fees associated with the 2020 Tender Offer as well as the write-off of unamortized debt issuance costs, premiums, and discounts. Related to the 2020 Tender Offer, we recognized debt prepayment and extinguishment costs of $68 million on the consolidated statement of cash flows for the year ended December 26, 2020, which reflect the $71 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $1 million, unamortized debt issuance costs of $3 million, and unamortized discounts of $1 million.

2019 Tender Offer

In September 2019, KHFC commenced an offer to purchase for cash any and all of its outstanding 5.375% senior notes due February 2020 (the “First 2019 Tender Offer”). The First 2019 Tender Offer expired on September 9, 2019 with a settlement date of September 10, 2019. Additionally, on September 11, 2019, KHFC commenced an offer to purchase for cash up to the maximum combined aggregate purchase price of $2.5 billion, excluding accrued and unpaid interest, of its outstanding 3.500% senior notes due June 2022, 3.500% senior notes due July 2022, 4.000% senior notes due June 2023, and 4.875% second lien senior secured notes due February 2025 (the “2025 Notes”) (the “Second 2019 Tender Offer” and, together with the First 2019 Tender Offer, the “2019 Tender Offers”). The Second 2019 Tender Offer settled on September 26, 2019.

The aggregate principal amounts of senior notes validly tendered pursuant to the 2019 Tender Offers was $2.7 billion and the aggregate principal amount of 2025 Notes validly tendered pursuant to the 2019 Tender Offers was $224 million.

In connection with the 2019 Tender Offers, we recognized a loss on extinguishment of debt of $88 million within interest expense on the consolidated statement of income for the year ended December 28, 2019. This loss primarily reflects the payment of early tender premiums and fees associated with the 2019 Tender Offers as well as the write-off of unamortized debt premiums, issuance costs, and discounts. Related to the 2019 Tender Offers, we recognized debt prepayment and extinguishment costs of $91 million on the consolidated statement of cash flows for the year ended December 28, 2019, which reflect the $88 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $10 million, unamortized debt issuance costs of $5 million, and unamortized discounts of $2 million.

Open Market Debt Repurchases:

In 2021, we repurchased approximately $738 million of certain of our senior notes under Rule 10b5-1 plans, including $207 million in the second quarter of 2021 (the “Q2 2021 Repurchases”), $221 million in the third quarter of 2021 (the “Q3 2021 Repurchases”), and $310 million in the fourth quarter of 2021 (the “Q4 2021 Repurchases” and, together with the Q2 2021 Repurchases and the Q3 2021 Repurchases, the “2021 Repurchases”). Refer to the table above to see which senior notes had amounts extinguished as part of the 2021 Repurchases.

In connection with the 2021 Repurchases, we recognized a loss on extinguishment of debt of approximately $152 million within interest expense on the consolidated statement of income for the year ended December 25, 2021, which included a loss of $28 million in the second quarter of 2021 related to the Q2 2021 Repurchases, a loss of $52 million in the third quarter of 2021 related to the Q3 2021 Repurchases, and a loss of $72 million in the fourth quarter of 2021 related to the Q4 2021 Repurchases. These losses primarily reflect the payment of premiums associated with the repurchases as well as the write-off of unamortized debt issuance costs, premiums, and discounts. Related to the 2021 Repurchases, we recognized debt prepayment and extinguishment costs of $162 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflect the $152 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $15 million, unamortized discounts of $2 million, and unamortized debt issuance costs of $3 million.

105

Debt Redemptions:

2021 Debt Redemptions

In April 2021, KHFC issued a notice of redemption of all of its 4.000% senior notes due June 2023, effective May 1, 2021 (the “Q2 2021 Debt Redemption”). Prior to the redemption, approximately $447 million aggregate principal amount was outstanding.

In June 2021, KHFC issued a notice of redemption of all of its 3.950% senior notes due July 2025, effective July 14, 2021 (the “Q3 2021 Debt Redemption” and, together with the Q2 2021 Debt Redemption, the “2021 Debt Redemptions”). Prior to the redemption, approximately $797 million aggregate principal amount was outstanding.

In connection with the 2021 Debt Redemptions, we recognized a loss on extinguishment of debt of $129 million within interest expense on the consolidated statement of income for the year ended December 25, 2021, which included a loss of $34 million in the second quarter of 2021 related to the Q2 2021 Debt Redemption and a loss of $95 million in the third quarter of 2021 related to the Q3 2021 Debt Redemption. These losses primarily reflect the payment of premiums and fees associated with the redemptions as well as the write-off of unamortized debt issuance costs. Related to the 2021 Debt Redemptions, we recognized debt prepayment and extinguishment costs of $126 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflect the $129 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized debt issuance costs of $3 million.

2020 Debt Redemptions

Concurrently with the commencement of the 2020 Tender Offer, KHFC issued a notice of conditional redemption of all of its $300 million outstanding aggregate principal amount of 3.375% senior notes due June 2021 ~~$1.6~~and $976 million outstanding aggregate principal amount of its 2025 Notes (the “First 2020 Debt Redemptions”). The First 2020 Debt Redemptions were effective and completed in the second quarter of 2020.

In September 2020, KHFC issued a notice of redemption of all of its 3.500% senior notes due July 2022, of which $302 million aggregate principal amount was outstanding (the “Second 2020 Debt Redemption” and, together with the First 2020 Debt Redemption, the “2020 Debt Redemptions”). The effective date of the Second 2020 Debt Redemption was October 24, 2020.

In connection with the 2020 Debt Redemptions, we recognized a loss on extinguishment of debt of $53 million within interest expense on the consolidated statement of income for the year ended December 26, 2020. This loss primarily reflects the payment of premiums and fees associated with the redemptions as well as the write-off of unamortized debt issuance costs. Related to the 2020 Debt Redemptions, we recognized debt prepayment and extinguishment costs of $48 million on the consolidated statement of cash flows for the year ended December 26, 2020, which reflect the $53 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized debt issuance costs of $5 million.

2019 Debt Redemptions

In September 2019, concurrently with the commencement of the First 2019 Tender Offer, we issued a notice of redemption by Kraft Heinz Canada ULC, our 100% owned subsidiary, of all of its 2.700% Canadian dollar senior notes due July 2020, of which 300 million Canadian dollar aggregate principal amount was outstanding, and a notice of partial redemption by KHFC of $800 million of its 2.800% senior notes due July 2020, of which $1.5 billion aggregate principal amount was outstanding (the “First 2019 Debt Redemptions”). The effective date of ~~4.000% senior notes due 2023, and $1.1 billion~~the First 2019 Debt Redemptions was October 3, 2019.

Concurrently with the commencement of the Second 2019 Tender Offer, we issued a notice of partial redemption providing for the redemption of $500 million aggregate principal amount of ~~4.625%~~KHFC’s remaining 2.800% senior notes due ~~2029~~July 2020 (the “Second 2019 Debt Redemption” and, together with the First 2019 Debt Redemptions, the “2019 Debt Redemptions”). The effective date of the Second 2019 Debt Redemption was October 11, 2019. Following the 2019 Debt Redemptions, KHFC’s 2.800% senior notes due July 2020 had $200 million aggregate principal amount outstanding.

In connection with the 2019 Debt Redemptions, we recognized a loss on extinguishment of debt of $10 million within interest expense on the consolidated statement of income for the year ended December 28, 2019. This loss primarily reflects the payment of premiums and fees associated with the redemptions as well as the write-off of unamortized debt issuance costs. Related to the 2019 Debt Redemptions, we recognized debt prepayment and extinguishment costs of $8 million on the consolidated statement of cash flows for the year ended December 28, 2019, which reflect the $10 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized debt issuance costs of $2 million.

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Debt Issuances:

2020 Debt Issuances

In May 2020, KHFC issued $1,350 million aggregate principal amount of 3.875% senior notes due May 2027, $1,350 million aggregate principal amount of 4.250% senior notes due March 2031, and $800 million aggregate principal amount of 5.500% senior notes due June 2050 (collectively, the ~~“New~~“2020 Notes”). The ~~New~~2020 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, and interest on a senior unsecured basis.

We used ~~approximately $500 million of~~ the proceeds from the ~~New~~2020 Notes to fund the 2020 Tender Offer and First 2020 Debt Redemptions and to pay fees and expenses in connection with the wind-down of our U.S. securitization program in the second quarter of 2018. We also used proceeds from the New Notes to refinance a portion of our commercial paper borrowings in the second quarter of 2018, to repay certain notes that matured in July and August 2018, and for other general corporate purposes.therewith.

2019 Debt Issuances

In ~~August 2017,~~September 2019, KHFC issued ~~$350~~$1,000 million aggregate principal amount of ~~floating rate~~3.750% senior notes due ~~2019, $650 million aggregate principal amount of floating rate senior notes due 2021, and~~April 2030, $500 million aggregate principal amount of ~~floating rate~~4.625% senior notes due ~~2022~~October 2039, and $1,500 million aggregate principal amount of 4.875% senior notes due October 2049 (collectively, the ~~“2017~~“2019 Notes”). The ~~2017~~2019 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, and interest on a senior unsecured basis.

We used the ~~net~~ proceeds from the ~~2017~~2019 Notes ~~primarily~~ to ~~repay all amounts outstanding under our $600 million Term Loan Facility together with accrued interest thereon,~~fund the Second 2019 Tender Offer and to ~~refinance a portion of our commercial paper programs,~~pay fees and ~~for other general corporate purposes.~~

In May 2016, KHFC issued $2.0 billion aggregate principal amount of 3.000% senior notes due June 2026, $3.0 billion aggregate principal amount of 4.375% senior notes due June 2046, €550 million aggregate principal amount of 1.500% senior notes due May 2024,expenses in connection therewith and ~~€1,250 million aggregate principal amount of 2.250% senior notes due May 2028 (collectively,~~to fund the ~~“2016 Notes”). The 2016 Notes are fully and unconditionally guaranteed by Kraft Heinz as to payment of principal, premium, and interest on a senior unsecured basis.~~

We used the net proceeds from the 2016 Notes primarily to redeem all outstanding shares of our 9.00% cumulative compounding preferred stock, Series A (“Series A Preferred Stock”) for $8.3 billion. See Note 20, ~~Capital Stock, for additional information.~~

Second 2019 Debt Redemption.

Debt Issuance Costs:

Debt issuance costs are reflected as a direct deduction of our long-term debt balance on the consolidated balance sheets. We incurred debt issuance costs ~~of $15~~$31 million in ~~2018~~2020 and ~~$53~~$25 million in ~~2016. Debt~~2019. We did not incur any debt issuance costs in ~~2017 were insignificant.~~2021. Unamortized debt issuance costs were ~~$115~~$97 million at December ~~29, 2018, $114~~25, 2021 and $130 million at December ~~30, 2017, and $124 million at December 31, 2016.~~26, 2020. Amortization of debt issuance costs was ~~$16~~$12 million in ~~2018, $16~~2021, $11 million in ~~2017,~~2020, and ~~$14~~$15 million in ~~2016.~~2019.

Debt Premium:

Unamortized debt premiums are presented on the consolidated balance sheets as a direct addition to the carrying amount of debt. Unamortized debt premium, net, was ~~$430~~$298 million at December ~~29, 2018~~25, 2021 and ~~$505~~$344 million at December ~~30, 2017.~~26, 2020. Amortization of our debt premium, net, was ~~$65~~$16 million in ~~2018, $81~~2021, $14 million in ~~2017,~~2020, and ~~$88~~$34 million in ~~2016.~~2019.

Debt Repayments:

In ~~July and August 2018,~~February 2021, we repaid ~~$2.7 billion~~$111 million aggregate principal amount of senior notes that matured in the period. ~~We funded these long-term debt repayments primarily with proceeds from the New Notes issued in June 2018.~~

~~Additionally, in June 2017,~~In September 2021, we repaid ~~$2.0 billion~~$34 million aggregate principal amount of senior notes that matured in the period. ~~We funded these long-term debt repayments primarily with cash on hand~~

In February 2020, we repaid $405 million aggregate principal amount of senior notes that matured in the period.

In July 2020, we repaid $200 million aggregate principal amount of senior notes and ~~our commercial paper programs.~~500 million Canadian dollars aggregate principal amount of senior notes that matured in the period.

In August 2019, we repaid $350 million aggregate principal amount of senior notes that matured in the period.

Fair Value of Debt:

At December ~~29, 2018,~~25, 2021, the aggregate fair value of our total debt was ~~$30.1~~$25.7 billion as compared with a carrying value of ~~$31.2~~$21.8 billion. At December ~~30, 2017,~~26, 2020, the aggregate fair value of our total debt was ~~$33.0~~$32.1 billion as compared with a carrying value of ~~$31.5~~$28.3 billion. Our short-term debt ~~and commercial paper~~ had a carrying ~~values~~value that approximated ~~their~~its fair ~~values~~value at December ~~29, 2018~~25, 2021 and December ~~30, 2017.~~26, 2020. We determined the fair value of our long-term debt using Level 2 inputs. Fair values are generally estimated based on quoted market prices for identical or similar instruments.

Note ~~20. Capital Stock~~18. Leases

~~Preferred Stock~~

We have operating and finance leases, primarily for warehouse, production, and office facilities and equipment. Our ~~Second Amended and Restated Certificate of Incorporation authorizes the issuance~~lease contracts have remaining contractual lease terms of up to ~~920,000 shares~~19 years, some of ~~preferred stock.~~

~~On June 7, 2016, we redeemed all 80,000 outstanding shares~~which include options to extend the term by up to 10 years. We include renewal options that are reasonably certain to be exercised as part of the lease term. Additionally, some lease contracts include termination options. We do not expect to exercise the majority of our ~~Series A Preferred Stock~~termination options and generally exclude such options when determining the term of our leases. See Note 2, Significant Accounting Policies, for ~~$8.3 billion.~~our lease accounting policy.

107

The components of our lease costs were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Operating lease costs	$	176	$	173	$	191
Finance lease costs:
Amortization of right-of-use assets	34		31		27
Interest on lease liabilities	6		7		6
Short-term lease costs	17		20		13
Variable lease costs	1,192		1,313		1,270
Sublease income	(9)		(11)		(14)
Total lease costs	$	1,416	$	1,533	$	1,493

Our variable lease costs primarily consist of inventory related costs, such as materials, labor, and overhead components in our manufacturing and distribution arrangements that also contain a fixed component related to an embedded lease. These variable lease costs are determined based on usage or output or may vary for other reasons such as changes in material prices, taxes, or insurance. Certain of our variable lease costs are based on fluctuating indices or rates. These leases are included in our ROU assets and lease liabilities based on the index or rate at the lease commencement date. The future variability in these indices and rates is unknown; therefore, it is excluded from our future minimum lease payments and is not a component of our ROU assets or lease liabilities.

Losses/(gains) on sales and leaseback transactions, net, were insignificant for 2021 and 2019. We ~~funded this redemption primarily through~~had no losses/(gains) on sale and leaseback transactions in 2020.

Supplemental balance sheet information related to our leases was (in millions, except lease term and discount rate):


	December 25, 2021						December 26, 2020
	Operating Leases			Finance Leases			Operating Leases			Finance Leases
Right-of-use assets	$	569		$	126		$	562		$	195
Lease liabilities (current)	133			30			135			78
Lease liabilities (non-current)	484			98			475			116

Weighted average remaining lease term	7 years			12 years			7 years			9 years
Weighted average discount rate	3.5		%	4.1		%	3.8		%	3.7		%

Operating lease ROU assets are included in other non-current assets and finance lease ROU assets are included in property, plant and equipment, net, on our consolidated balance sheets. The current portion of operating lease liabilities is included in other current liabilities, and the ~~issuance~~current portion of finance lease liabilities is included in the current portion of long-term debt on our consolidated balance sheets. The non-current portion of operating lease liabilities is included in ~~May 2016,~~other non-current liabilities, and the non-current portion of finance lease liabilities is included in long-term debt on our consolidated balance sheets. At December 26, 2020, operating and finance lease ROU assets, the current portion of operating and finance lease liabilities, and the non-current portion of operating and finance lease liabilities excluded amounts classified as ~~well as other sources~~held for sale. See Note 4, Acquisitions and Divestitures, for additional information.

Cash flows arising from lease transactions were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash inflows/(outflows) from operating leases	$	(179)	$	(191)	$	(196)
Operating cash inflows/(outflows) from finance leases	(6)		(7)		(6)
Financing cash inflows/(outflows) from finance leases	(33)		(35)		(28)
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	41		147		42
Finance leases	14		39		12

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Future minimum lease payments for leases in effect at December 25, 2021 were (in millions):


	Operating Leases		Finance Leases
2022	$	152	$	34
2023	116		20
2024	90		14
2025	79		10
2026	63		8
Thereafter	196		79
Total future undiscounted lease payments	696		165
Less imputed interest	(79)		(37)
Total lease liability	$	617	$	128

At December 25, 2021, our operating and finance leases that had not yet commenced were approximately $202 million. This balance is primarily composed of ~~liquidity, including our U.S. commercial paper program, U.S. securitization program, and cash on hand. In connection~~a 20-year lease for a warehouse facility with a future minimum lease commitment of approximately $109 million. We expect to take control of the ~~redemption, all Series A Preferred~~leased assets in 2022.

Note 19. Capital Stock ~~was canceled and automatically retired.~~

Common Stock

Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of up to 5.0 billion shares of common stock.

Shares of common stock issued, in treasury, and outstanding were (in millions of shares):


	Shares Issued	Treasury Shares	Shares Outstanding
Balance at December 29, 2018	1,224	(4)	1,220
Exercise of stock options, issuance of other stock awards, and other	—	1	1
Balance at December 28, 2019	1,224	(3)	1,221
Exercise of stock options, issuance of other stock awards, and other	4	(2)	2
Balance at December 26, 2020	1,228	(5)	1,223
Exercise of stock options, issuance of other stock awards, and other	7	(6)	1
Balance at December 25, 2021	1,235	(11)	1,224

Shares Issued Treasury Shares Shares Outstanding
Balance at January 3, 2016 1,214
—
1,214
Exercise of stock options, issuance of other stock awards, and other 5
(2 ) 3
Balance at December 31, 2016 1,219
(2 ) 1,217
Exercise of stock options, issuance of other stock awards, and other 2
—
2
Balance at December 30, 2017 1,221
(2 ) 1,219
Exercise of stock options, issuance of other stock awards, and other 3
(2 ) 1
Balance at December 29, 2018 1,224
(4 ) 1,220

Note ~~21.~~20. Earnings Per Share

Our earnings per common share (“EPS”) were:

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
(in millions, except per share data)
Basic Earnings Per Common Share:
Net income/(loss) attributable to common shareholders $ (10,192 ) $ 10,941
$ 3,416
Weighted average shares of common stock outstanding 1,219
1,218
1,217
Net earnings/(loss) $ (8.36 ) $ 8.98
$ 2.81
Diluted Earnings Per Common Share:
Net income/(loss) attributable to common shareholders $ (10,192 ) $ 10,941
$ 3,416
Weighted average shares of common stock outstanding 1,219
1,218
1,217
Effect of dilutive equity awards —
10
9
Weighted average shares of common stock outstanding, including dilutive effect 1,219
1,228
1,226
Net earnings/(loss) $ (8.36 ) $ 8.91
$ 2.78

Basic and diluted EPS for the years ended December 30, 2017 and December 31, 2016 reflect the restatements that impacted net income/(loss) attributable to common shareholders. The restatements had no impact on weighted average shares of common stock outstanding or dilutive equity awards in prior periods. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for additional information.~~


	December 25, 2021		December 26, 2020		December 28, 2019
	(in millions, except per share data)
Basic Earnings Per Common Share:
Net income/(loss) attributable to common shareholders	$	1,012	$	356	$	1,935
Weighted average shares of common stock outstanding	1,224		1,223		1,221
Net earnings/(loss)	$	0.83	$	0.29	$	1.59
Diluted Earnings Per Common Share:
Net income/(loss) attributable to common shareholders	$	1,012	$	356	$	1,935
Weighted average shares of common stock outstanding	1,224		1,223		1,221
Effect of dilutive equity awards	12		5		3
Weighted average shares of common stock outstanding, including dilutive effect	1,236		1,228		1,224
Net earnings/(loss)	$	0.82	$	0.29	$	1.58

We use the treasury stock method to calculate the dilutive effect of outstanding equity awards in the denominator for diluted EPS. We had net losses attributable to common shareholders in 2018. Therefore, we have excluded the dilutive effects of equity awards in 2018 as their inclusion would have had an anti-dilutive effect on EPS. Anti-dilutive shares were 137 million in ~~2018, 2~~2021, 9 million in ~~2017,~~2020, and 310 million in ~~2016.~~2019.

109

Note ~~22.~~21. Segment Reporting

We manage and report our operating results through 3 reportable segments defined by geographic region: United States, International, and Canada.

Management evaluates segment performance based on several factors, including net sales and Segment Adjusted EBITDA. Segment Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), ~~net,~~ provision for/(benefit from) income taxes, and depreciation and amortization (excluding ~~integration and~~ restructuring ~~expenses)~~activities); in addition to these adjustments, we exclude, when they occur, the impacts of ~~integration and~~divestiture-related license income (e.g., income related to the sale of licenses in connection with the Cheese Transaction), restructuring ~~expenses,~~activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, ~~gains/(losses) on the sale of a business, other gains/(losses) related to acquisitions~~certain non-ordinary course legal and ~~divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses),~~regulatory matters, and equity award compensation expense (excluding ~~integration and~~ restructuring ~~expenses)~~activities). Segment Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. Management uses Segment Adjusted EBITDA to evaluate segment performance and allocate resources.

Management does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.

Net sales by segment were (in millions):

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Net sales:
United States $ 18,122
$ 18,230
$ 18,469
Canada 2,173
2,177
2,302
EMEA 2,718
2,585
2,586
Rest of World 3,255
3,084
2,943
Total net sales $ 26,268
$ 26,076
$ 26,300

~~Net sales for the years ended December 30, 2017 and December 31, 2016 reflect the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.


	December 25, 2021		December 26, 2020		December 28, 2019
Net sales:
United States	$	18,604	$	19,204	$	17,844
International	5,691		5,341		5,251
Canada	1,747		1,640		1,882
Total net sales	$	26,042	$	26,185	$	24,977

Segment Adjusted EBITDA was (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Segment Adjusted EBITDA:
United States	$	5,157	$	5,557	$	4,829
International	1,066		1,058		1,004
Canada	419		389		487
General corporate expenses	(271)		(335)		(256)
Depreciation and amortization (excluding restructuring activities)	(910)		(955)		(985)
Divestiture-related license income	4		—		—
Restructuring activities	(84)		(15)		(102)
Deal costs	(11)		(8)		(19)
Unrealized gains/(losses) on commodity hedges	(17)		6		57
Impairment losses	(1,634)		(3,413)		(1,899)
Certain non-ordinary course legal and regulatory matters	(62)		—		—
Equity award compensation expense (excluding restructuring activities)	(197)		(156)		(46)
Operating income/(loss)	3,460		2,128		3,070
Interest expense	2,047		1,394		1,361
Other expense/(income)	(295)		(296)		(952)
Income/(loss) before income taxes	$	1,708	$	1,030	$	2,661

110

As Restated & Recast
December 29,
2018 December 30,
2017 December 31,
2016
Segment Adjusted EBITDA:
United States $ 5,218
$ 5,873
$ 5,744
Canada 608
636
632
EMEA 724
673
741
Rest of World 635
590
621
General corporate expenses (161 ) (108 ) (164 )
Depreciation and amortization (excluding integration and restructuring expenses) (919 ) (907 ) (875 )
Integration and restructuring expenses (297 ) (583 ) (992 )
Deal costs (23 ) —
(30 )
Unrealized gains/(losses) on commodity hedges (21 ) (19 ) 38
Impairment losses (15,936 ) (49 ) (71 )
Gains/(losses) on sale of business (15 ) —
—
Nonmonetary currency devaluation —
—
(4 )
Equity award compensation expense (excluding integration and restructuring expenses) (33 ) (49 ) (39 )
Operating income/(loss) (10,220 ) 6,057
5,601
Interest expense 1,284
1,234
1,134
Other expense/(income), net (183 ) (627 ) (472 )
Income/(loss) before income taxes $ (11,321 ) $ 5,450
$ 4,939

Segment Adjusted EBITDA for the years ended December 30, 2017 and December 31, 2016 reflects restatements and has been recast to reflect the impact of adopting ASU 2017-07 in the first quarter of 2018. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for additional information. In addition, see Note 23,~~ ~~Quarterly Financial Data (Unaudited), for restated Segment Adjusted EBITDA for the interim periods within fiscal years 2018 and 2017.~~

Total depreciation and amortization expense by segment was (in millions):

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Depreciation and amortization expense:
United States $ 626
$ 658
$ 966
Canada 39
48
56
EMEA 102
99
87
Rest of World 119
98
84
General corporate expenses 97
128
144
Total depreciation and amortization expense $ 983
$ 1,031
$ 1,337

~~Depreciation and amortization expense for the year ended December 30, 2017 reflects the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.

The decrease in depreciation and amortization expense in 2017 compared to 2016 was primarily driven by accelerated depreciation recognized in 2016 resulting from factory closures as part of our Integration Program. See Note 6, ~~Integration and Restructuring Expenses, for additional information.~~


	December 25, 2021		December 26, 2020		December 28, 2019
Depreciation and amortization expense:
United States	$	542	$	609	$	609
International	234		221		231
Canada	38		35		35
General corporate expenses	96		104		119
Total depreciation and amortization expense	$	910	$	969	$	994

Total capital expenditures by segment were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Capital expenditures:
United States	$	433	$	318	$	393
International	348		212		283
Canada	44		29		27
General corporate expenses	80		37		65
Total capital expenditures	$	905	$	596	$	768

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Capital expenditures:
United States $ 388
$ 764
$ 843
Canada 21
42
30
EMEA 124
127
115
Rest of World 236
184
96
General corporate expenses 57
77
163
Total capital expenditures $ 826
$ 1,194
$ 1,247
Net sales by platform were (in millions):

~~Capital expenditures for~~


	December 25, 2021		December 26, 2020		December 28, 2019
Taste Elevation	$	7,267	$	6,808	$	6,581
Fast Fresh Meals	6,665		6,819		6,298
Easy Meals Made Better	4,927		4,909		4,314
Real Food Snacking	1,808		2,296		2,201
Flavorful Hydration	1,777		1,648		1,495
Easy Indulgent Desserts	1,034		999		919
Other	2,564		2,706		3,169
Total net sales	$	26,042	$	26,185	$	24,977

In 2021, following the ~~year ended December 30, 2017~~divestiture of certain of our global cheese businesses, we reorganized certain products within our platforms to reflect how we plan to manage our business going forward, including the ~~restatements described~~role assigned to these products and platforms within our business. We have reflected these changes in ~~Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.all historical periods presented.

Net sales by product category were (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Condiments and sauces	$	7,302	$	6,813	$	6,406
Cheese and dairy	4,922		5,131		4,890
Ambient foods	2,896		2,954		2,475
Frozen and chilled foods	2,698		2,599		2,371
Meats and seafood	2,613		2,515		2,406
Refreshment beverages	1,786		1,655		1,504
Coffee	847		1,062		1,271
Infant and nutrition	441		433		512
Desserts, toppings and baking	1,157		1,121		1,032
Nuts and salted snacks	464		1,047		966
Other	916		855		1,144
Total net sales	$	26,042	$	26,185	$	24,977

111

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Condiments and sauces $ 6,752
$ 6,429
$ 6,297
Cheese and dairy 5,287
5,409
5,537
Ambient foods 2,576
2,564
2,488
Frozen and chilled foods 2,548
2,578
2,577
Meats and seafood 2,505
2,567
2,659
Refreshment beverages 1,507
1,506
1,517
Coffee 1,438
1,422
1,489
Infant and nutrition 756
755
761
Desserts, toppings and baking 1,038
1,033
1,054
Nuts and salted snacks 967
970
1,069
Other 894
843
852
Total net sales $ 26,268
$ 26,076
$ 26,300

In 2018, we reorganized the products within our product categories to reflect how we manage our business. We have reflected this change for all historical periods presented. In addition, net sales by product category for the years ended December 30, 2017 and December 31, 2016 reflect the restatements described in Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements~~.

Concentration of Risk:

Our largest customer, Walmart Inc., represented approximately 22% of our net sales in both 2021 and 2020 and approximately 21% of our net sales in ~~2018, 21% of our net sales in 2017, and approximately 22% of our net sales in 2016.~~2019. All of our segments have sales to Walmart Inc.

Geographic Financial Information:

We had significant sales in the United States, Canada, and the United Kingdom. Our net sales by geography were (in millions):

As Restated
December 29,
2018 December 30,
2017 December 31,
2016
Net sales:
United States $ 18,218
$ 18,324
$ 18,556
Canada 2,173
2,177
2,302
United Kingdom 1,071
1,018
1,053
Other 4,806
4,557
4,389
Total net sales $ 26,268
$ 26,076
$ 26,300

~~Net sales by geography for the years ended December 30, 2017 and December 31, 2016 reflect the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.


	December 25, 2021		December 26, 2020		December 28, 2019
Net sales:
United States	$	18,604	$	19,204	$	17,844
Canada	1,747		1,640		1,882
United Kingdom	1,147		1,103		1,007
Other	4,544		4,238		4,244
Total net sales	$	26,042	$	26,185	$	24,977

We had significant long-lived assets in the United ~~States, Canada, and the United Kingdom.~~States. Long-lived assets ~~include~~are comprised of property, plant and equipment, ~~goodwill, trademarks, and other intangible assets,~~ net of related ~~depreciation and amortization.~~accumulated depreciation. Our long-lived assets by geography were (in millions):


	December 25, 2021		December 26, 2020
Long-lived assets:
United States	$	4,547	$	4,705
Other	2,259		2,171
Total long-lived assets	$	6,806	$	6,876

As Restated
December 29,
2018 December 30,
2017
Long-lived assets:
United States $ 79,057
$ 92,504
United Kingdom 4,996
6,226
Canada 3,620
6,585
Other 5,376
6,003
Total long-lived assets $ 93,049
$ 111,318

At December ~~29, 2018,~~25, 2021 and December 26, 2020, long-lived assets by geography excluded amounts classified as held for sale. See Note 5, 4, Acquisitions and Divestitures,for additional information.

Note 22. Other Financial Data

Consolidated Statements of Income Information

Other expense/(income)

Other expense/(income) consists of the following (in millions):


	December 25, 2021		December 26, 2020		December 28, 2019
Amortization of postemployment benefit plans prior service costs/(credits)	$	(7)	$	(122)	$	(306)
Net pension and postretirement non-service cost/(benefit)(a)	(214)		(201)		(172)
Loss/(gain) on sale of business(b)	(44)		2		(420)
Interest income	(15)		(27)		(36)
Foreign exchange losses/(gains)	(101)		162		10
Derivative losses/(gains)	86		(154)		(39)
Other miscellaneous expense/(income)	—		44		11
Other expense/(income)	$	(295)	$	(296)	$	(952)

(a) Excludes amortization of prior service costs/(credits).

(b) Includes a gain on the remeasurement of a disposal group that was reclassified as held and used in the third quarter of 2021.

We present all non-service cost components of net pension cost/(benefit) and net postretirement cost/(benefit) within other expense/(income) on our consolidated statements of income. See Note 12, Postemployment Benefits, for additional ~~information. Long-lived assets at December 30, 2017 reflect the restatements described in Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements~~.

~~Note 23. Quarterly Financial Data (Unaudited)~~

~~Our quarterly financial data for 2018~~information on these components, including any curtailments and ~~2017 is summarized~~settlements, as ~~follows:~~

2018 Quarters
As Restated
Fourth Third Second First
(in millions, except per share data)
Net sales $ 6,891
$ 6,383
$ 6,690
$ 6,304
Gross profit 2,216
2,094
2,347
2,264
Net income/(loss) (12,628 ) 618
753
1,003
Net income/(loss) attributable to common shareholders (12,568 ) 619
754
1,003
Per share data applicable to common shareholders:
Basic earnings/(loss) (10.30 ) 0.51
0.62
0.82
Diluted earnings/(loss) (10.30 ) 0.50
0.62
0.82

2017 Quarters
As Restated & Recast
Fourth Third Second First
(in millions, except per share data)
Net sales $ 6,841
$ 6,279
$ 6,634
$ 6,322
Gross profit 2,287
2,156
2,407
2,183
Net income/(loss) 7,982
912
1,157
881
Net income/(loss) attributable to common shareholders 7,989
913
1,156
883
Per share data applicable to common shareholders:
Basic earnings/(loss) 6.55
0.75
0.95
0.73
Diluted earnings/(loss) 6.50
0.74
0.94
0.72

~~Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements~~

~~We have restated herein~~well as information on our ~~previously issued unaudited condensed consolidated financial statements for each interim period within the nine months ended September 29, 2018 and the fiscal year ended December 30, 2017. See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for additional information.~~

The following tables represent our restated unaudited condensed consolidated financial statements for each quarter-to-date and year-to-date interim period within the nine months ended September 29, 2018 and the fiscal year ended December 30, 2017 and at each interim period therein. The 2018 quarterly restatements will be effective with the filing of our future 2019 unaudited interim condensed consolidated financial statement filings in Quarterly Reports on Form 10-Q.

The values as previously reported for the fiscal quarters ended September 29, 2018, June 30, 2018, and March 31, 2018 were derived from our Quarterly Reports on Form 10-Q filed on November 2, 2018, August 3, 2018, and May 3, 2018, respectively. The values as previously reported for the fiscal quarter ended December 30, 2017 were derived from our Annual Report on Form 10-K for the year ended December 30, 2017 filed on February 16, 2018. The values as previously reported for the fiscal quarters ended September 30, 2017, July 1, 2017, and April 1, 2017 were derived from our Quarterly Reports on Form 10-Q, as amended for the first and second quarters, all of which were filed on November 7, 2017. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

In addition, the condensed consolidated statements of income for the interim periods within the year ended December 30, 2017, as previously reported, did not originally reflect the adoption of ASU 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). This ASU was adopted in the first quarter of 2018 and was applied retrospectively for statement of income presentation ofprior service ~~cost components and other net periodic benefit cost components. Our condensed consolidated statements of income for the interim periods within fiscal year 2017 have been recast accordingly.~~credit amortization. See Note 4, ~~New Accounting Standards~~Acquisitions and Divestitures, for additional information related to our ~~adoption~~loss/(gain) on sale of ~~ASU 2017-07.~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Income~~

~~(in millions, except per share data)~~

As Restated
December 29, 2018
September 29,
2018
June 30,
2018 March 31, 2018
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
Net sales $ 6,891
$ 6,383
$ 19,377
$ 6,690
$ 12,994
$ 6,304
Cost of products sold 4,675
4,289
12,672
4,343
8,383
4,040
Gross profit 2,216
2,094
6,705
2,347
4,611
2,264
Selling, general and administrative expenses, excluding impairment losses 867
803
2,338
771
1,535
764
Goodwill impairment losses 6,875
—
133
133
133
—
Intangible asset impairment losses 8,610
217
318
101
101
—
Selling, general and administrative expenses 16,352
1,020
2,789
1,005
1,769
764
Operating income/(loss) (14,136 ) 1,074
3,916
1,342
2,842
1,500
Interest expense 325
326
959
316
633
317
Other expense/(income), net 13
(71 ) (196 ) (35 ) (125 ) (90 )
Income/(loss) before income taxes (14,474 ) 819
3,153
1,061
2,334
1,273
Provision for/(benefit from) income taxes (1,846 ) 201
779
308
578
270
Net income/(loss) (12,628 ) 618
2,374
753
1,756
1,003
Net income/(loss) attributable to noncontrolling interest (60 ) (1 ) (2 ) (1 ) (1 ) —
Net income/(loss) attributable to Kraft Heinz (12,568 ) 619
2,376
754
1,757
1,003
Preferred dividends —
—
—
—
—
—
Net income/(loss) attributable to common shareholders $ (12,568 ) $ 619
$ 2,376
$ 754
$ 1,757
$ 1,003
Per share data applicable to common shareholders:
Basic earnings/(loss) $ (10.30 ) $ 0.51
$ 1.95
$ 0.62
$ 1.44
$ 0.82
Diluted earnings/(loss) (10.30 ) 0.50
1.94
0.62
1.43
0.82

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Income~~

~~(in millions, except per share data)~~

As Restated & Recast
December 30, 2017
September 30,
2017
July 1,
2017 April 1,
2017
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
Net sales $ 6,841
$ 6,279
$ 19,235
$ 6,634
$ 12,956
$ 6,322
Cost of products sold 4,554
4,123
12,489
4,227
8,366
4,139
Gross profit 2,287
2,156
6,746
2,407
4,590
2,183
Selling, general and administrative expenses, excluding impairment losses 778
664
2,149
720
1,485
765
Goodwill impairment losses —
—
—
—
—
—
Intangible asset impairment losses —
1
49
48
48
—
Selling, general and administrative expenses 778
665
2,198
768
1,533
765
Operating income/(loss) 1,509
1,491
4,548
1,639
3,057
1,418
Interest expense 308
306
926
307
620
313
Other expense/(income), net (116 ) (127 ) (511 ) (254 ) (384 ) (130 )
Income/(loss) before income taxes 1,317
1,312
4,133
1,586
2,821
1,235
Provision for/(benefit from) income taxes (6,665 ) 400
1,183
429
783
354
Net income/(loss) 7,982
912
2,950
1,157
2,038
881
Net income/(loss) attributable to noncontrolling interest (7 ) (1 ) (2 ) 1
(1 ) (2 )
Net income/(loss) attributable to Kraft Heinz 7,989
913
2,952
1,156
2,039
883
Preferred dividends —
—
—
—
—
—
Net income/(loss) attributable to common shareholders $ 7,989
$ 913
$ 2,952
$ 1,156
$ 2,039
$ 883
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 6.55
$ 0.75
$ 2.42
$ 0.95
$ 1.67
$ 0.73
Diluted earnings/(loss) 6.50
0.74
2.40
0.94
1.66
0.72

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(in millions)~~

As Restated

December 29,
2018

September 29,
2018
June 30,
2018 March 31, 2018
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
Net income/(loss) $ (12,628 ) $ 618
$ 2,374
$ 753
$ 1,756
$ 1,003
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (378 ) (144 ) (809 ) (862 ) (665 ) 197
Net deferred gains/(losses) on net investment hedges 126
13
158
219
145
(74 )
Amounts excluded from the effectiveness assessment of net investment hedges 4
3
3
—
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) (5 ) (2 ) (2 ) —
—
—
Net deferred gains/(losses) on cash flow hedges 59
(16 ) 40
34
56
22
Amounts excluded from the effectiveness assessment of cash flow hedges 2
—
—
—
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (34 ) 12
(10 ) (9 ) (22 ) (13 )
Net actuarial gains/(losses) arising during the period (12 ) 17
70
53
53
—
Prior service credits/(costs) arising during the period 3
—
—
—
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) 15
(58 ) (133 ) (17 ) (75 ) (58 )
Total other comprehensive income/(loss) (220 ) (175 ) (683 ) (582 ) (508 ) 74
Total comprehensive income/(loss) (12,848 ) 443
1,691
171
1,248
1,077
Comprehensive income/(loss) attributable to noncontrolling interest (61 ) (3 ) (15 ) (7 ) (12 ) (5 )
Comprehensive income/(loss) attributable to Kraft Heinz $ (12,787 ) $ 446
$ 1,706
$ 178
$ 1,260
$ 1,082

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(in millions)~~

As Restated

December 30,
2017

September 30,
2017
July 1,
2017 April 1,
2017
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
Net income/(loss) $ 7,982
$ 912
$ 2,950
$ 1,157
$ 2,038
$ 881
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 7
419
1,178
455
759
304
Net deferred gains/(losses) on net investment hedges (26 ) (124 ) (327 ) (152 ) (203 ) (51 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
—
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
—
—
—
Net deferred gains/(losses) on cash flow hedges 23
(70 ) (136 ) (32 ) (66 ) (34 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
—
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (12 ) 51
97
26
46
20
Net actuarial gains/(losses) arising during the period 82
(4 ) (13 ) 1
(9 ) (10 )
Prior service credits/(costs) arising during the period 16
—
1
1
1
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (49 ) (51 ) (260 ) (154 ) (209 ) (55 )
Total other comprehensive income/(loss) 41
221
540
145
319
174
Total comprehensive income/(loss) 8,023
1,133
3,490
1,302
2,357
1,055
Comprehensive income/(loss) attributable to noncontrolling interest 1
(1 ) (4 ) 1
(3 ) (4 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 8,022
$ 1,134
$ 3,494
$ 1,301
$ 2,360
$ 1,059

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheets~~

~~(in millions, except per share data)~~

As Restated

September 29,
2018

June 30,
2018

March 31,
2018
ASSETS
Cash and cash equivalents $ 1,366
$ 3,369
$ 1,794
Trade receivables (net of allowances of $24 at September 29, 2018, $24 at June 30, 2018, and $24 at March 31, 2018) 2,032
1,950
1,044
Sold receivables —
37
530
Income taxes receivable 203
211
121
Inventories 3,214
3,094
3,089
Prepaid expenses 389
388
367
Other current assets 352
431
426
Assets held for sale —
—
—
Total current assets 7,556
9,480
7,371
Property, plant and equipment, net 7,074
7,117
7,145
Goodwill 44,339
44,302
44,844
Intangible assets, net 58,727
59,084
59,583
Other non-current assets 1,879
1,766
1,640
TOTAL ASSETS $ 119,575
$ 121,749
$ 120,583
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 973
$ 34
$ 1,003
Current portion of long-term debt 371
2,723
2,715
Trade payables 4,238
4,236
4,148
Accrued marketing 494
480
576
Interest payable 315
404
345
Other current liabilities 1,231
1,236
1,500
Liabilities held for sale —
—
—
Total current liabilities 7,622
9,113
10,287
Long-term debt 30,887
31,269
28,465
Deferred income taxes 14,224
14,260
14,106
Accrued postemployment costs 394
394
400
Other non-current liabilities 1,035
998
1,023
TOTAL LIABILITIES 54,162
56,034
54,281
Commitments and Contingencies

Redeemable noncontrolling interest 6
7
8
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,222 shares issued and 1,219 shares outstanding at September 29, 2018, 1,222 shares issued and 1,219 shares outstanding at June 30, 2018, and 1,222 shares issued and 1,219 shares outstanding at March 31, 2018)
12
12
12
Additional paid-in capital 58,716
58,689
58,656
Retained earnings/(deficit) 8,479
8,624
8,634
Accumulated other comprehensive income/(losses) (1,724 ) (1,551 ) (975 )
Treasury stock, at cost (3 shares at September 29, 2018, 3 shares at June 30, 2018, and 3 shares at March 31, 2018) (264 ) (254 ) (240 )
Total shareholders' equity 65,219
65,520
66,087
Noncontrolling interest 188
188
207
TOTAL EQUITY 65,407
65,708
66,294
TOTAL LIABILITIES AND EQUITY $ 119,575
$ 121,749
$ 120,583

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheets~~

~~(in millions, except per share data)~~

As Restated

September 30,
2017

July 1,
2017

April 1,
2017
ASSETS
Cash and cash equivalents $ 1,441
$ 1,445
$ 3,242
Trade receivables (net of allowances of $29 at September 30, 2017, $28 at July 1, 2017, and $30 at April 1, 2017) 938
973
936
Sold receivables 427
461
538
Income taxes receivable 290
237
269
Inventories 3,136
3,012
3,094
Prepaid expenses 368
359
349
Other current assets 527
547
611
Assets held for sale —
—
—
Total current assets 7,127
7,034
9,039
Property, plant and equipment, net 6,902
6,804
6,689
Goodwill 44,859
44,566
44,301
Intangible assets, net 59,483
59,383
59,313
Other non-current assets 1,531
1,535
1,604
TOTAL ASSETS $ 119,902
$ 119,322
$ 120,946
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 457
$ 1,090
$ 909
Current portion of long-term debt 2,747
19
2,022
Trade payables 3,873
3,805
3,858
Accrued marketing 500
499
601
Interest payable 295
406
346
Other current liabilities 1,578
1,589
1,905
Liabilities held for sale —
—
—
Total current liabilities 9,450
7,408
9,641
Long-term debt 28,276
29,978
29,747
Deferred income taxes 20,841
20,840
20,873
Accrued postemployment costs 1,808
1,975
2,016
Other non-current liabilities 715
701
851
TOTAL LIABILITIES 61,090
60,902
63,128
Commitments and Contingencies

Redeemable noncontrolling interest —
—
—
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,221 shares issued and 1,218 shares outstanding at September 30, 2017; 1,221 shares issued and 1,218 shares outstanding at July 1, 2017; 1,220 shares issued and 1,218 shares outstanding at April 1, 2017) 12
12
12
Additional paid-in capital 58,618
58,597
58,565
Retained earnings/(deficit) 1,280
1,129
705
Accumulated other comprehensive income/(losses) (1,087 ) (1,308 ) (1,453 )
Treasury stock, at cost (3 shares at September 30, 2017, 3 shares at July 1, 2017, and 2 shares at April 1, 2017) (223 ) (223 ) (223 )
Total shareholders' equity 58,600
58,207
57,606
Noncontrolling interest 212
213
212
TOTAL EQUITY 58,812
58,420
57,818
TOTAL LIABILITIES AND EQUITY $ 119,902
$ 119,322
$ 120,946

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Equity~~

~~(in millions, except per share data)~~

As Restated
For the Nine Months Ended September 29, 2018
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
2,376
—
—
7
2,383
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(670 ) —
(13 ) (683 )
Dividends declared-common stock ($1.875 per share) —
—
(2,286 ) —
—
—
(2,286 )
Cumulative effect of accounting standards adopted in the period —
—
(97 ) —
—
—
(97 )
Exercise of stock options, issuance of other stock awards, and other —
82
(9 ) —
(40 ) (13 ) 20
Balance at September 29, 2018 $ 12
$ 58,716
$ 8,479
$ (1,724 ) $ (264 ) $ 188
$ 65,407

As Restated
For the Six Months Ended June 30, 2018
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
1,757
—
—
5
1,762
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(497 ) —
(11 ) (508 )
Dividends declared-common stock ($1.25 per share) —
—
(1,524 ) —
—
—
(1,524 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
55
(9 ) —
(30 ) (13 ) 3
Balance at June 30, 2018 $ 12
$ 58,689
$ 8,624
$ (1,551 ) $ (254 ) $ 188
$ 65,708

As Restated
For the Three Months Ended March 31, 2018
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
1,003
—
�� —
5
1,008
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
79
—
(5 ) 74
Dividends declared-common stock ($0.625 per share) —
—
(762 ) —
—
—
(762 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
22
(7 ) —
(16 ) —
(1 )
Balance at March 31, 2018 $ 12
$ 58,656
$ 8,634
$ (975 ) $ (240 ) $ 207
$ 66,294

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Equity~~

~~(in millions, except per share data)~~

As Restated
For the Nine Months Ended September 30, 2017
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 31, 2016 $ 12
$ 58,516
$ 552
$ (1,629 ) $ (207 ) $ 216
$ 57,460
Net income/(loss) —
—
2,952
—
—
(2 ) 2,950
Other comprehensive income/(loss) —
—
—
542
—
(2 ) 540
Dividends declared-common stock ($1.825 per share) —
—
(2,225 ) —
—
—
(2,225 )
Exercise of stock options, issuance of other stock awards, and other —
102
1
—
(16 ) —
87
Balance at September 30, 2017 $ 12
$ 58,618
$ 1,280
$ (1,087 ) $ (223 ) $ 212
$ 58,812

As Restated
For the Six Months Ended July 1, 2017
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 31, 2016 $ 12
$ 58,516
$ 552
$ (1,629 ) $ (207 ) $ 216
$ 57,460
Net income/(loss) —
—
2,039
—
—
(1 ) 2,038
Other comprehensive income/(loss) —
—
—
321
—
(2 ) 319
Dividends declared-common stock ($1.20 per share) —
—
(1,463 ) —
—
—
(1,463 )
Exercise of stock options, issuance of other stock awards, and other —
81
1
—
(16 ) —
66
Balance at July 1, 2017 $ 12
$ 58,597
$ 1,129
$ (1,308 ) $ (223 ) $ 213
$ 58,420

As Restated
For the Three Months Ended April 1, 2017
Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
Balance at December 31, 2016 $ 12
$ 58,516
$ 552
$ (1,629 ) $ (207 ) $ 216
$ 57,460
Net income/(loss) —
—
883
—
—
(2 ) 881
Other comprehensive income/(loss) —
—
—
176
—
(2 ) 174
Dividends declared-common stock ($0.60 per share) —
—
(731 ) —
—
—
(731 )
Exercise of stock options, issuance of other stock awards, and other —
49
1
—
(16 ) —
34
Balance at April 1, 2017 $ 12
$ 58,565
$ 705
$ (1,453 ) $ (223 ) $ 212
$ 57,818

~~The Kraft Heinz Company~~

~~Consolidated Statements of Cash Flows~~

~~(in millions)~~

As Restated
September 29, 2018
June 30,
2018

March 31,
2018
Nine Months Ended Six Months Ended Three Months Ended
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 2,374
$ 1,756
$ 1,003
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 712
462
227
Amortization of postretirement benefit plans prior service costs/(credits) (261 ) (183 ) (106 )
Equity award compensation expense 44
27
7
Deferred income tax provision/(benefit) 104
79
(46 )
Postemployment benefit plan contributions (64 ) (60 ) (22 )
Goodwill and intangible asset impairment losses 451
234
—
Nonmonetary currency devaluation 131
67
47
Other items, net 35
27
(22 )
Changes in current assets and liabilities:
Trade receivables (2,154 ) (2,001 ) (712 )
Inventories (645 ) (428 ) (312 )
Accounts payable 130
127
(85 )
Other current assets (103 ) (44 ) 26
Other current liabilities 124
153
403
Net cash provided by/(used for) operating activities 878
216
408
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,296
1,221
436
Capital expenditures (594 ) (438 ) (223 )
Payments to acquire business, net of cash acquired (248 ) (215 ) (215 )
Other investing activities, net 31
11
6
Net cash provided by/(used for) investing activities 485
579
4
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,706 ) (12 ) (6 )
Proceeds from issuance of long-term debt 2,990
2,990
—
Proceeds from issuance of commercial paper 2,485
1,525
1,524
Repayments of commercial paper (1,950 ) (1,950 ) (1,006 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (2,421 ) (1,659 ) (897 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net (35 ) (3 ) 14
Net cash provided by/(used for) financing activities (1,637 ) 891
(371 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (128 ) (80 ) (10 )
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (402 ) 1,606
31
Balance at beginning of period 1,769
1,769
1,769
Balance at end of period $ 1,367
$ 3,375
$ 1,800
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 938
$ 899
$ 613

~~The Kraft Heinz Company~~

~~Consolidated Statements of Cash Flows~~

~~(in millions)~~

As Restated
September 30, 2017
July 1,
2017

April 1,
2017
Nine Months Ended Six Months Ended Three Months Ended
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 2,950
$ 2,038
$ 881
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 789
517
262
Amortization of postretirement benefit plans prior service costs/(credits) (247 ) (171 ) (82 )
Equity award compensation expense 36
24
11
Deferred income tax provision/(benefit) 432
223
68
Postemployment benefit plan contributions (283 ) (90 ) (38 )
Goodwill and intangible asset impairment losses 49
48
—
Nonmonetary currency devaluation 36
33
8
Other items, net (62 ) (48 ) 40
Changes in current assets and liabilities:
Trade receivables (2,061 ) (1,598 ) (1,040 )
Inventories (567 ) (418 ) (475 )
Accounts payable 123
84
62
Other current assets (90 ) (103 ) (72 )
Other current liabilities (1,090 ) (717 ) (240 )
Net cash provided by/(used for) operating activities 15
(178 ) (615 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,633
1,069
464
Capital expenditures (956 ) (690 ) (368 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 45
44
38
Net cash provided by/(used for) investing activities 722
423
134
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,635 ) (2,032 ) (27 )
Proceeds from issuance of long-term debt 1,496
4
2
Proceeds from issuance of commercial paper 5,495
4,213
2,324
Repayments of commercial paper (5,709 ) (3,777 ) (2,068 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (2,161 ) (1,434 ) (736 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net 28
15
—
Net cash provided by/(used for) financing activities (3,486 ) (3,011 ) (505 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 43
29
13
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (2,706 ) (2,737 ) (973 )
Balance at beginning of period 4,255
4,255
4,255
Balance at end of period $ 1,549
$ 1,518
$ 3,282
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 1,936
$ 1,407
$ 880

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net sales $ 6,378
$ 5
(g) $ 6,383
Cost of products sold 4,271
18
(a)(b)(g) 4,289
Gross profit 2,107
(13 ) 2,094
Selling, general and administrative expenses, excluding impairment losses 803
—
(g) 803
Goodwill impairment losses —
—
—
Intangible asset impairment losses 234
(17 ) (f) 217
Selling, general and administrative expenses 1,037
(17 ) 1,020
Operating income/(loss) 1,070
4
1,074
Interest expense 327
(1 ) (b)(g) 326
Other expense/(income), net (71 ) —
(71 )
Income/(loss) before income taxes 814
5
819
Provision for/(benefit from) income taxes 186
15
(a)(b)(e)(f)(g) 201
Net income/(loss) 628
(10 ) 618
Net income/(loss) attributable to noncontrolling interest (2 ) 1
(g) (1 )
Net income/(loss) attributable to Kraft Heinz 630
(11 ) 619
Preferred dividends —
—
—
Net income/(loss) attributable to common shareholders $ 630
$ (11 ) $ 619
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.52
$ (0.01 ) $ 0.51
Diluted earnings/(loss) 0.51
(0.01 ) 0.50

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $13 million and a decrease to provision for income taxes of $2 million for the three months ended September 29, 2018.

(b) Capital Leases—The correction of these misstatements resulted in an increase to cost of products sold of less than $1 million, a decrease to interest expense of $1 million, and an increase to provision for income taxes of less than $1 million for the three months ended September 29, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of $14 million for the three months ended September 29, 2018.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of $17 million and an increase to provision for income taxes of $4 million for the three months ended September 29, 2018.

(g) Other—The correction of these misstatements resulted in an increase to net sales of $5 million, an increase to cost of products sold of $5 million, an increase to SG&A of less than $1 million, a decrease to interest expense of less than $1 million, a decrease to provision for income taxes of $1 million, and a decrease to net loss attributable to noncontrolling interest of $1 million for the three months ended September 29, 2018.

business. See Note 2, ~~Restatement of Previously Issued Consolidated~~ 13, Financial ~~Statements~~Instruments, for ~~a description~~information related to our derivative impacts.

112

Other expense/(income) was $295 million of ~~the misstatements~~income in ~~each category~~2021 compared to $296 million of ~~restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

(income in ~~millions, except per share data)~~

For the Nine Months Ended September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net sales $ 19,368
$ 9
(g) $ 19,377
Cost of products sold 12,651
21
(a)(b)(g) 12,672
Gross profit 6,717
(12 ) 6,705
Selling, general and administrative expenses, excluding impairment losses 2,338
—
(g) 2,338
Goodwill impairment losses 164
(31 ) (f) 133
Intangible asset impairment losses 335
(17 ) (f) 318
Selling, general and administrative expenses 2,837
(48 ) 2,789
Operating income/(loss) 3,880
36
3,916
Interest expense 962
(3 ) (b)(g) 959
Other expense/(income), net (196 ) —
(196 )
Income/(loss) before income taxes 3,114
39
3,153
Provision for/(benefit from) income taxes 738
41
(a)(b)(e)(f)(g) 779
Net income/(loss) 2,376
(2 ) 2,374
Net income/(loss) attributable to noncontrolling interest (3 ) 1
(g) (2 )
Net income/(loss) attributable to Kraft Heinz 2,379
(3 ) 2,376
Preferred dividends —
—
—
Net income/(loss) attributable to common shareholders $ 2,379
$ (3 ) $ 2,376
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 1.95
$ —
$ 1.95
Diluted earnings/(loss) 1.94
—
1.94

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $22 million and a decrease to provision for income taxes of $3 million for the nine months ended September 29, 2018.

(b) Capital Leases—The correction of these misstatements resulted in an increase to cost of products sold of $1 million, a decrease to interest expense of $3 million, and an increase to provision for income taxes of less than $1 million for the nine months ended September 29, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of $40 million for the nine months ended September 29, 2018.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of $48 million and an increase to provision for income taxes of $4 million for the nine months ended September 29, 2018.

(g) Other—The correction of these misstatements resulted in an increase to net sales of $9 million, a decrease to cost of products sold of $2 million, an increase to SG&A of less than $1 million, a decrease to interest expense of less than $1 million, an increase to provision for income taxes of less than $1 million, and a decrease to net loss attributable to noncontrolling interest of $1 million for the nine months ended September 29, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net sales $ 6,686
$ 4
(g) $ 6,690
Cost of products sold 4,321
22
(a)(b)(g) 4,343
Gross profit 2,365
(18 ) 2,347
Selling, general and administrative expenses, excluding impairment losses 771
—
771
Goodwill impairment losses 164
(31 ) (f) 133
Intangible asset impairment losses 101
—
101
Selling, general and administrative expenses 1,036
(31 ) 1,005
Operating income/(loss) 1,329
13
1,342
Interest expense 318
(2 ) (b)(g) 316
Other expense/(income), net (35 ) —
(35 )
Income/(loss) before income taxes 1,046
15
1,061
Provision for/(benefit from) income taxes 291
17
(a)(b)(e)(f)(g) 308
Net income/(loss) 755
(2 ) 753
Net income/(loss) attributable to noncontrolling interest (1 ) —
(1 )
Net income/(loss) attributable to Kraft Heinz 756
(2 ) 754
Preferred dividends —
—
—
Net income/(loss) attributable to common shareholders $ 756
$ (2 ) $ 754
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.62
$ —
$ 0.62
Diluted earnings/(loss) 0.62
—
0.62

(b) Capital Leases—The correction of these misstatements resulted in an increase to cost of products sold of $1 million, a decrease to interest expense of $2 million, and an increase to provision for income taxes of less than $1 million for the three months ended June 30, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of $21 million for the three months ended June 30, 2018.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of $31 million and an increase to provision for income taxes of less than $1 million for the three months ended June 30, 2018.

(g) Other—The correction of these misstatements resulted in an increase to net sales of $4 million, an increase to cost of products sold of $8 million, a decrease to interest expense of less than $1 million, and a decrease to provision for income taxes of $2 million for the three months ended June 30, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Six Months Ended June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net sales $ 12,990
$ 4
(g) $ 12,994
Cost of products sold 8,380
3
(a)(b)(g) 8,383
Gross profit 4,610
1
4,611
Selling, general and administrative expenses, excluding impairment losses 1,535
—
1,535
Goodwill impairment losses 164
(31 ) (f) 133
Intangible asset impairment losses 101
—
101
Selling, general and administrative expenses 1,800
(31 ) 1,769
Operating income/(loss) 2,810
32
2,842
Interest expense 635
(2 ) (b)(g) 633
Other expense/(income), net (125 ) —
(125 )
Income/(loss) before income taxes 2,300
34
2,334
Provision for/(benefit from) income taxes 552
26
(a)(b)(e)(f)(g) 578
Net income/(loss) 1,748
8
1,756
Net income/(loss) attributable to noncontrolling interest (1 ) —
(1 )
Net income/(loss) attributable to Kraft Heinz 1,749
8
1,757
Preferred dividends —
—
—
Net income/(loss) attributable to common shareholders $ 1,749
$ 8
$ 1,757
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 1.43
$ 0.01
$ 1.44
Diluted earnings/(loss) 1.43
—
1.43

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $9 million and a decrease to provision for income taxes of $1 million for the six months ended June 30, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of $26 million for the six months ended June 30, 2018.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of $31 million and an increase to provision for income taxes of less than $1 million for the six months ended June 30, 2018.

(g) Other—The correction of these misstatements resulted in an increase to net sales of $4 million, a decrease to cost of products sold of $7 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of $1 million for the six months ended June 30, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended March 31, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net sales $ 6,304
$ —
$ 6,304
Cost of products sold 4,059
(19 ) (a)(b)(g) 4,040
Gross profit 2,245
19
2,264
Selling, general and administrative expenses, excluding impairment losses 764
—
764
Goodwill impairment losses —
—
—
Intangible asset impairment losses —
—
(f) —
Selling, general and administrative expenses 764
—
764
Operating income/(loss) 1,481
19
1,500
Interest expense 317
—
(b)(g) 317
Other expense/(income), net (90 ) —
(90 )
Income/(loss) before income taxes 1,254
19
1,273
Provision for/(benefit from) income taxes 261
9
(a)(b)(e)(f)(g) 270
Net income/(loss) 993
10
1,003
Net income/(loss) attributable to noncontrolling interest —
—
—
Net income/(loss) attributable to Kraft Heinz 993
10
1,003
Preferred dividends —
—
—
Net income/(loss) attributable to common shareholders $ 993
$ 10
$ 1,003
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.81
$ 0.01
$ 0.82
Diluted earnings/(loss) 0.81
0.01
0.82

(a) Supplier Rebates—The correction of these misstatements resulted in a decrease to cost of products sold of $4 million and an increase to provision for income taxes of $1 million for the three months ended March 31, 2018.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to cost of products sold of less than $1 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of less than $1 million for the three months ended March 31, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of $5 million for the three months ended March 31, 2018.~~

(f) Impairments—The correction of these misstatements resulted in a decrease to SG&A of less than $1 million and an increase to provision for income taxes of less than $1 million for the three months ended March 31, 2018.

(g) Other—The correction of these misstatements resulted in a decrease to cost of products sold of $15 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of $3 million for the three months ended March 31, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 6,877
$ (36 ) (c)(g) $ 6,841
$ —
$ 6,841
Cost of products sold 4,470
(18 ) (a)(b)(c)(g) 4,452
102
4,554
Gross profit 2,407
(18 ) 2,389
(102 ) 2,287
Selling, general and administrative expenses, excluding impairment losses 767
(4 ) (c)(g) 763
15
778
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
(f) —
—
—
Selling, general and administrative expenses 767
(4 ) 763
15
778
Operating income/(loss) 1,640
(14 ) 1,626
(117 ) 1,509
Interest expense 308
—
(g) 308
—
308
Other expense/(income), net 1
—
1
(117 ) (116 )
Income/(loss) before income taxes 1,331
(14 ) 1,317
—
1,317
Provision for/(benefit from) income taxes (6,665 ) —
(a)(b)(e)(f)(g) (6,665 ) —
(6,665 )
Net income/(loss) 7,996
(14 ) 7,982
—
7,982
Net income/(loss) attributable to noncontrolling interest (7 ) —
(7 ) —
(7 )
Net income/(loss) attributable to Kraft Heinz 8,003
(14 ) 7,989
—
7,989
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 8,003
$ (14 ) $ 7,989
$ —
$ 7,989
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 6.57
$ (0.02 ) $ 6.55
$ —
$ 6.55
Diluted earnings/(loss) 6.52
(0.02 ) 6.50
—
6.50

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $21 million and a decrease to benefit from income taxes of $8 million for the three months ended December 30, 2017.

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $33 million, a decrease to cost of products sold of $31 million, and a decrease to SG&A of $2 million for the three months ended December 30, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to benefit from income taxes of $12 million for the three months ended December 30, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $3 million, a decrease to cost of products sold of $8 million, a decrease to SG&A of $2 million, a decrease to interest expense of less than $1 million, and a decrease to benefit from income taxes of $4 million for the three months ended December 30, 2017.

~~The values as previously reported for the three months ended December 30, 2017 were derived from our Annual Report on Form 10-K for the year ended December 30, 2017 filed on February 16, 2018.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 6,314
$ (35 ) (c)(g) $ 6,279
$ —
$ 6,279
Cost of products sold 4,000
14
(a)(c)(g) 4,014
109
4,123
Gross profit 2,314
(49 ) 2,265
(109 ) 2,156
Selling, general and administrative expenses, excluding impairment losses 652
(2 ) (c) 650
14
664
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses 1
—
(f) 1
—
1
Selling, general and administrative expenses 653
(2 ) 651
14
665
Operating income/(loss) 1,661
(47 ) 1,614
(123 ) 1,491
Interest expense 306
—
(g) 306
—
306
Other expense/(income), net (4 ) —
(4 ) (123 ) (127 )
Income/(loss) before income taxes 1,359
(47 ) 1,312
—
1,312
Provision for/(benefit from) income taxes 416
(16 ) (a)(e)(f)(g) 400
—
400
Net income/(loss) 943
(31 ) 912
—
912
Net income/(loss) attributable to noncontrolling interest (1 ) —
(1 ) —
(1 )
Net income/(loss) attributable to Kraft Heinz 944
(31 ) 913
—
913
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 944
$ (31 ) $ 913
$ —
$ 913
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.78
$ (0.03 ) $ 0.75
$ —
$ 0.75
Diluted earnings/(loss) 0.77
(0.03 ) 0.74
—
0.74

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $36 million and a decrease to provision for income taxes of $13 million for the three months ended September 30, 2017.

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $34 million, a decrease to cost of products sold of $32 million, and a decrease to SG&A of $2 million for the three months ended September 30, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of less than $1 million for the three months ended September 30, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $1 million, an increase to cost of products sold of $10 million, a decrease to interest expense of less than $1 million, and a decrease to provision for income taxes of $3 million for the three months ended September 30, 2017.

~~The values as previously reported for the three months ended September 30, 2017 were derived from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 7, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Nine Months Ended September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 19,355
$ (120 ) (c)(g) $ 19,235
$ —
$ 19,235
Cost of products sold 12,059
(26 ) (a)(c)(g) 12,033
456
12,489
Gross profit 7,296
(94 ) 7,202
(456 ) 6,746
Selling, general and administrative expenses, excluding impairment losses 2,114
(28 ) (c)(g) 2,086
63
2,149
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses 49
—
(f) 49
—
49
Selling, general and administrative expenses 2,163
(28 ) 2,135
63
2,198
Operating income/(loss) 5,133
(66 ) 5,067
(519 ) 4,548
Interest expense 926
—
(g) 926
—
926
Other expense/(income), net 8
—
8
(519 ) (511 )
Income/(loss) before income taxes 4,199
(66 ) 4,133
—
4,133
Provision for/(benefit from) income taxes 1,205
(22 ) (a)(e)(f)(g) 1,183
—
1,183
Net income/(loss) 2,994
(44 ) 2,950
—
2,950
Net income/(loss) attributable to noncontrolling interest (2 ) —
(2 ) —
(2 )
Net income/(loss) attributable to Kraft Heinz 2,996
(44 ) 2,952
—
2,952
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 2,996
$ (44 ) $ 2,952
$ —
$ 2,952
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 2.46
$ (0.04 ) $ 2.42
$ —
$ 2.42
Diluted earnings/(loss) 2.44
(0.04 ) 2.40
—
2.40

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $72 million and a decrease to provision for income taxes of $26 million for the nine months ended September 30, 2017.

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $114 million, a decrease to cost of products sold of $108 million, and a decrease to SG&A of $6 million for the nine months ended September 30, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of less than $1 million for the nine months ended September 30, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $6 million, an increase to cost of products sold of $10 million, a decrease to SG&A of $22 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of $4 million for the nine months ended September 30, 2017.

~~The values as previously reported for the nine months ended September 30, 2017 were derived from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed on November 7, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 6,677
$ (43 ) (c)(g) $ 6,634
$ —
$ 6,634
Cost of products sold 3,996
(15 ) (a)(c)(g) 3,981
246
4,227
Gross profit 2,681
(28 ) 2,653
(246 ) 2,407
Selling, general and administrative expenses, excluding impairment losses 712
(24 ) (c)(g) 688
32
720
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses 48
—
(f) 48
—
48
Selling, general and administrative expenses 760
(24 ) 736
32
768
Operating income/(loss) 1,921
(4 ) 1,917
(278 ) 1,639
Interest expense 307
—
(g) 307
—
307
Other expense/(income), net 24
—
24
(278 ) (254 )
Income/(loss) before income taxes 1,590
(4 ) 1,586
—
1,586
Provision for/(benefit from) income taxes 430
(1 ) (a)(e)(f)(g) 429
—
429
Net income/(loss) 1,160
(3 ) 1,157
—
1,157
Net income/(loss) attributable to noncontrolling interest 1
—
1
—
1
Net income/(loss) attributable to Kraft Heinz 1,159
(3 ) 1,156
—
1,156
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 1,159
$ (3 ) $ 1,156
$ —
$ 1,156
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.95
$ —
$ 0.95
$ —
$ 0.95
Diluted earnings/(loss) 0.94
—
0.94
—
0.94

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $23 million and a decrease to provision for income taxes of $8 million for the three months ended July 1, 2017.

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $40 million, a decrease to cost of products sold of $38 million, and a decrease to SG&A of $2 million for the three months ended July 1, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in a decrease to provision for income taxes of less than $1 million for the three months ended July 1, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $3 million, an increase to cost of products sold of less than $1 million, a decrease to SG&A of $22 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of $7 million for the three months ended July 1, 2017.

~~The values as previously reported for the three months ended July 1, 2017 were derived from our Quarterly Report on Form 10-Q/A for the quarter ended July 1, 2017 filed on November 7, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Income~~

~~(in millions, except per share data)~~

For the Six Months Ended July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 13,041
$ (85 ) (c)(g) $ 12,956
$ —
$ 12,956
Cost of products sold 8,059
(40 ) (a)(c)(g) 8,019
347
8,366
Gross profit 4,982
(45 ) 4,937
(347 ) 4,590
Selling, general and administrative expenses, excluding impairment losses 1,462
(26 ) (c)(g) 1,436
49
1,485
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses 48
—
(f) 48
—
48
Selling, general and administrative expenses 1,510
(26 ) 1,484
49
1,533
Operating income/(loss) 3,472
(19 ) 3,453
(396 ) 3,057
Interest expense 620
—
(g) 620
—
620
Other expense/(income), net 12
—
12
(396 ) (384 )
Income/(loss) before income taxes 2,840
(19 ) 2,821
—
2,821
Provision for/(benefit from) income taxes 789
(6 ) (a)(e)(f)(g) 783
—
783
Net income/(loss) 2,051
(13 ) 2,038
—
2,038
Net income/(loss) attributable to noncontrolling interest (1 ) —
(1 ) —
(1 )
Net income/(loss) attributable to Kraft Heinz 2,052
(13 ) 2,039
—
2,039
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 2,052
$ (13 ) $ 2,039
$ —
$ 2,039
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 1.69
$ (0.02 ) $ 1.67
$ —
$ 1.67
Diluted earnings/(loss) 1.67
(0.01 ) 1.66
—
1.66

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $80 million, a decrease to cost of products sold of $76 million, and a decrease to SG&A of $4 million for the six months ended July 1, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of less than $1 million for the six months ended July 1, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $5 million, an increase to cost of products sold of less than $1 million, a decrease to SG&A of $22 million, a decrease to interest expense of less than $1 million, and an increase to provision for income taxes of $7 million for the six months ended July 1, 2017.

~~The values as previously reported for the six months ended July 1, 2017 were derived from our Quarterly Report on Form 10-Q/A for the quarter ended July 1, 2017 filed on November 7, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Income~~

~~(in millions, except per share data)~~

For the Three Months Ended April 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated ASU Adoption Impacts As Restated & Recast
Net sales $ 6,364
$ (42 ) (c)(g) $ 6,322
$ —
$ 6,322
Cost of products sold 4,063
(25 ) (a)(c)(g) 4,038
101
4,139
Gross profit 2,301
(17 ) 2,284
(101 ) 2,183
Selling, general and administrative expenses, excluding impairment losses 750
(2 ) (c) 748
17
765
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
(f) —
—
—
Selling, general and administrative expenses 750
(2 ) 748
17
765
Operating income/(loss) 1,551
(15 ) 1,536
(118 ) 1,418
Interest expense 313
—
(g) 313
—
313
Other expense/(income), net (12 ) —
(12 ) (118 ) (130 )
Income/(loss) before income taxes 1,250
(15 ) 1,235
—
1,235
Provision for/(benefit from) income taxes 359
(5 ) (a)(e)(f)(g) 354
—
354
Net income/(loss) 891
(10 ) 881
—
881
Net income/(loss) attributable to noncontrolling interest (2 ) —
(2 ) —
(2 )
Net income/(loss) attributable to Kraft Heinz 893
(10 ) 883
—
883
Preferred dividends —
—
—
—
—
Net income/(loss) attributable to common shareholders $ 893
$ (10 ) $ 883
$ —
$ 883
Per share data applicable to common shareholders:
Basic earnings/(loss) $ 0.73
$ —
$ 0.73
$ —
$ 0.73
Diluted earnings/(loss) 0.73
(0.01 ) 0.72
—
0.72

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to cost of products sold of $13 million and a decrease to provision for income taxes of $5 million for the three months ended April 1, 2017.

~~(b) Capital Leases—None.~~

(c) Customer Incentive Program Expense Misclassifications—As previously disclosed in March 2018, the correction of these misstatements resulted in a decrease to net sales of $40 million, a decrease to cost of products sold of $38 million, and a decrease to SG&A of $2 million for the three months ended April 1, 2017.

~~(d) Balance Sheet Misclassifications—None.~~

~~(e) Income Taxes—The correction of these misstatements resulted in an increase to provision for income taxes of less than $1 million for the three months ended April 1, 2017.~~

(g) Other—The correction of these misstatements resulted in a decrease to net sales of $2 million, an increase to cost of products sold of less than $1 million, a decrease to interest expense of less than $1 million, and a decrease to provision for income taxes of less than $1 million for the three months ended April 1, 2017.

~~The values as previously reported for the three months ended April 1, 2017 were derived from our Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2017 filed on November 7, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 628
$ (10 ) (a)(b)(e)(f)(g) $ 618
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (146 ) 2
(b)(e)(f) (144 )
Net deferred gains/(losses) on net investment hedges 13
—
13
Amounts excluded from the effectiveness assessment of net investment hedges 3
—
3
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) (2 ) —
(2 )
Net deferred gains/(losses) on cash flow hedges (16 ) —
(16 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 12
—
12
Net actuarial gains/(losses) arising during the period 17
—
17
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (58 ) —
(58 )
Total other comprehensive income/(loss) (177 ) 2
(175 )
Total comprehensive income/(loss) 451
(8 ) 443
Comprehensive income/(loss) attributable to noncontrolling interest (4 ) 1
(g) (3 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 455
$ (9 ) $ 446

~~The $10 million decrease to net income~~2020. This change was primarily driven by ~~misstatements~~an $86 million net loss on derivative activities in 2021 compared to a $154 million net gain on derivative activities in 2020 and a $115 million decrease in non-cash amortization of postemployment benefit plans prior service credits as compared to the ~~income taxes and supplier rebates categories,~~prior year period. These impacts were partially offset by ~~misstatements~~a $101 million net foreign exchange gain in 2021 compared to a $162 million net foreign exchange loss in 2020, a $44 million net gain on sales of businesses in 2021 compared to a $2 million net loss on sales of businesses in 2020, and a $26 million loss on the ~~impairments, capital leases, and other categories. See additional descriptions~~dissolution of ~~the net income impacts~~a joint venture in ~~the consolidated statement~~2020.

Other expense/(income) was $296 million of income ~~for the three months ended September 29, 2018 section above.~~

~~The $2~~in 2020 compared to $952 million ~~increase to foreign currency translation adjustments is the result~~ of ~~misstatements~~income in ~~the income taxes, capital leases, and impairments categories.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Nine Months Ended September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 2,376
$ (2 ) (a)(b)(e)(f)(g) $ 2,374
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (817 ) 8
(b)(e)(f) (809 )
Net deferred gains/(losses) on net investment hedges 158
—
158
Amounts excluded from the effectiveness assessment of net investment hedges 3
—
3
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) (2 ) —
(2 )
Net deferred gains/(losses) on cash flow hedges 40
—
40
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (10 ) —
(10 )
Net actuarial gains/(losses) arising during the period 70
—
70
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (133 ) —
(133 )
Total other comprehensive income/(loss) (691 ) 8
(683 )
Total comprehensive income/(loss) 1,685
6
1,691
Comprehensive income/(loss) attributable to noncontrolling interest (16 ) 1
(g) (15 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,701
$ 5
$ 1,706

~~The $2 million decrease to net income~~2019. This change was primarily driven by ~~misstatements~~a $2 million net loss on sales of businesses in 2020 compared to a $420 million net gain on sale of business in 2019, a $184 million decrease in non-cash amortization of postemployment benefit plans prior service credits as compared to the ~~income taxes~~prior year period, a $162 million net foreign exchange loss in 2020 compared to a $10 million net foreign exchange loss in 2019, and ~~supplier rebates categories,~~a $26 million loss on the dissolution of a joint venture in 2020. These impacts were partially offset by ~~misstatements~~a $154 million net gain on derivative activities in ~~the impairments, other, and capital leases categories. See additional descriptions of the~~2020 compared to a $39 million net ~~income impacts~~gain on derivative activities in ~~the consolidated statement of income for the nine months ended September 29, 2018 section above.~~

~~The $8 million increase to foreign currency translation adjustments is the result of misstatements in the income taxes, capital leases, and impairments categories.~~

2019.See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 755
$ (2 ) (a)(b)(e)(f)(g) $ 753
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (868 ) 6
(b)(e)(f) (862 )
Net deferred gains/(losses) on net investment hedges 219
—
219
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges 34
—
34
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (9 ) —
(9 )
Net actuarial gains/(losses) arising during the period 53
—
53
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (17 ) —
(17 )
Total other comprehensive income/(loss) (588 ) 6
(582 )
Total comprehensive income/(loss) 167
4
171
Comprehensive income/(loss) attributable to noncontrolling interest (7 ) —
(7 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 174
$ 4
$ 178

~~The $2 million decrease to net income was primarily driven by misstatements in the income taxes, supplier rebates,~~16, Commitments and other categories, partially offset by misstatements in the impairments and capital leases categories. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended June 30, 2018 section above.

~~The $6 million increase to foreign currency translation adjustments is the result of misstatements in the income taxes, capital leases, and impairments categories.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Six Months Ended June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 1,748
$ 8
(a)(b)(e)(f)(g) $ 1,756
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments (671 ) 6
(b)(e)(f) (665 )
Net deferred gains/(losses) on net investment hedges 145
—
145
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges 56
—
56
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (22 ) —
(22 )
Net actuarial gains/(losses) arising during the period 53
—
53
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (75 ) —
(75 )
Total other comprehensive income/(loss) (514 ) 6
(508 )
Total comprehensive income/(loss) 1,234
14
1,248
Comprehensive income/(loss) attributable to noncontrolling interest (12 ) —
(12 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,246
$ 14
$ 1,260

The $8 million increase to net income was primarily driven by misstatements in the impairments, other, and capital leases categories, partially offset by misstatements in the income taxes and supplier rebates categories. See additional descriptions of the net income impacts in the consolidated statement of income for the six months ended June 30, 2018 section above.

~~The $6 million increase to foreign currency translation adjustments is the result of misstatements in the income taxes, capital leases, and impairments categories.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended March 31, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 993
$ 10
(a)(b)(e)(f)(g) $ 1,003
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 197
—
(b)(e) 197
Net deferred gains/(losses) on net investment hedges (74 ) —
(74 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges 22
—
22
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (13 ) —
(13 )
Net actuarial gains/(losses) arising during the period —
—
—
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (58 ) —
(58 )
Total other comprehensive income/(loss) 74
—
74
Total comprehensive income/(loss) 1,067
10
1,077
Comprehensive income/(loss) attributable to noncontrolling interest (5 ) —
(5 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,072
$ 10
$ 1,082

The $10 million increase to net income was primarily driven by misstatements in the other, supplier rebates, capital leases, and impairments categories, partially offset by misstatements in the income taxes category. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended March 31, 2018 section above.

~~The less than $1 million decrease to foreign currency translation adjustments is the result of misstatements in the income taxes and capital leases categories.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended December 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 7,996
$ (14 ) (a)(b)(e)(f)(g) $ 7,982
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 5
2
(b)(e) 7
Net deferred gains/(losses) on net investment hedges (26 ) —
(26 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges 23
—
23
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) (12 ) —
(12 )
Net actuarial gains/(losses) arising during the period 82
—
82
Prior service credits/(costs) arising during the period 16
—
16
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (49 ) —
(49 )
Total other comprehensive income/(loss) 39
2
41
Total comprehensive income/(loss) 8,035
(12 ) 8,023
Comprehensive income/(loss) attributable to noncontrolling interest 1
—
1
Comprehensive income/(loss) attributable to Kraft Heinz $ 8,034
$ (12 ) $ 8,022

The $14 million decrease to net income was primarily driven by misstatements in the supplier rebates category, partially offset by misstatements in the income taxes, other, capital leases, and impairments categories. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended December 30, 2017 section above.

~~The $2 million decrease to foreign currency translation adjustments is the result of misstatements in the income taxes and capital leases categories.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 943
$ (31 ) (a)(e)(f)(g) $ 912
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 421
(2 ) (e) 419
Net deferred gains/(losses) on net investment hedges (124 ) —
(124 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (70 ) —
(70 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 51
—
51
Net actuarial gains/(losses) arising during the period (4 ) —
(4 )
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (51 ) —
(51 )
Total other comprehensive income/(loss) 223
(2 ) 221
Total comprehensive income/(loss) 1,166
(33 ) 1,133
Comprehensive income/(loss) attributable to noncontrolling interest (1 ) —
(1 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,167
$ (33 ) $ 1,134

The $31 million decrease to net income was primarily driven by misstatements in the supplier rebates, other, and income taxes categories, partially offset by misstatements in the impairments category. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended September 30, 2017 section above.

~~The $2 million decrease to foreign currency translation adjustments is the result of misstatements in the income taxes category.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Nine Months Ended September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 2,994
$ (44 ) (a)(e)(f)(g) $ 2,950
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 1,179
(1 ) (e) 1,178
Net deferred gains/(losses) on net investment hedges (327 ) —
(327 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (136 ) —
(136 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 97
—
97
Net actuarial gains/(losses) arising during the period (13 ) —
(13 )
Prior service credits/(costs) arising during the period 1
—
1
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (260 ) —
(260 )
Total other comprehensive income/(loss) 541
(1 ) 540
Total comprehensive income/(loss) 3,535
(45 ) 3,490
Comprehensive income/(loss) attributable to noncontrolling interest (4 ) —
(4 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 3,539
$ (45 ) $ 3,494

The $44 million decrease to net income was primarily driven by misstatements in the supplier rebates and income taxes categories, partially offset by misstatements in the other and impairments categories. See additional descriptions of the net income impacts in the consolidated statement of income for the nine months ended September 30, 2017 section above.

~~The $1 million decrease to foreign currency translation adjustments is the result of misstatements in the income taxes category.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 1,160
$ (3 ) (a)(e)(f)(g) $ 1,157
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 451
4
(e) 455
Net deferred gains/(losses) on net investment hedges (152 ) —
(152 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (32 ) —
(32 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 26
—
26
Net actuarial gains/(losses) arising during the period 1
—
1
Prior service credits/(costs) arising during the period 1
—
1
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (154 ) —
(154 )
Total other comprehensive income/(loss) 141
4
145
Total comprehensive income/(loss) 1,301
1
1,302
Comprehensive income/(loss) attributable to noncontrolling interest 1
—
1
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,300
$ 1
$ 1,301

The $3 million decrease to net income was primarily driven by misstatements in the supplier rebates category, partially offset by misstatements in the other, income taxes, and impairments categories. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended July 1, 2017 section above.

~~The $4 million increase to foreign currency translation adjustments is the result of misstatements in the income taxes category.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(in millions)~~

For the Six Months Ended July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 2,051
$ (13 ) (a)(e)(f)(g) $ 2,038
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 758
1
(e) 759
Net deferred gains/(losses) on net investment hedges (203 ) —
(203 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (66 ) —
(66 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 46
—
46
Net actuarial gains/(losses) arising during the period (9 ) —
(9 )
Prior service credits/(costs) arising during the period 1
—
1
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (209 ) —
(209 )
Total other comprehensive income/(loss) 318
1
319
Total comprehensive income/(loss) 2,369
(12 ) 2,357
Comprehensive income/(loss) attributable to noncontrolling interest (3 ) —
(3 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 2,372
$ (12 ) $ 2,360

The $13 million decrease to net income was primarily driven by misstatements in the supplier rebates and income taxes categories, partially offset by misstatements in the other and impairments categories. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended July 1, 2017 section above.

~~The $1 million increase to foreign currency translation adjustments is the result of misstatements in the income taxes category.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(in millions)~~

For the Three Months Ended April 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
Net income/(loss) $ 891
$ (10 ) (a)(e)(f)(g) $ 881
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments 307
(3 ) (e) 304
Net deferred gains/(losses) on net investment hedges (51 ) —
(51 )
Amounts excluded from the effectiveness assessment of net investment hedges —
—
—
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) —
—
—
Net deferred gains/(losses) on cash flow hedges (34 ) —
(34 )
Amounts excluded from the effectiveness assessment of cash flow hedges —
—
—
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 20
—
20
Net actuarial gains/(losses) arising during the period (10 ) —
(10 )
Prior service credits/(costs) arising during the period —
—
—
Net postemployment benefit losses/(gains) reclassified to net income/(loss) (55 ) —
(55 )
Total other comprehensive income/(loss) 177
(3 ) 174
Total comprehensive income/(loss) 1,068
(13 ) 1,055
Comprehensive income/(loss) attributable to noncontrolling interest (4 ) —
(4 )
Comprehensive income/(loss) attributable to Kraft Heinz $ 1,072
$ (13 ) $ 1,059

The $10 million decrease to net income was primarily driven by misstatements in the supplier rebates, other, and income taxes categories, partially offset by misstatements in the impairments category. See additional descriptions of the net income impacts in the consolidated statement of income for the three months ended April 1, 2017 section above.

~~The $3 million decrease to foreign currency translation adjustments is the result of misstatements in the income taxes category.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 1,366
$ —
$ 1,366
Trade receivables (net of allowances of $24 at September 29, 2018) 2,032
—
2,032
Sold receivables —
—
—
Income taxes receivable 195
8
(a)(b)(e)(g) 203
Inventories 3,287
(73 ) (d)(g) 3,214
Prepaid expenses 389
—
389
Other current assets 321
31
(a)(d) 352
Assets held for sale —
—
—
Total current assets 7,590
(34 ) 7,556
Property, plant and equipment, net 7,216
(142 ) (b)(g) 7,074
Goodwill 44,308
31
(f)(g) 44,339
Intangible assets, net 58,727
—
58,727
Other non-current assets 1,889
(10 ) (e) 1,879
TOTAL ASSETS $ 119,730
$ (155 ) $ 119,575
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 973
$ —
$ 973
Current portion of long-term debt 405
(34 ) (b)(g) 371
Trade payables 4,312
(74 ) (g) 4,238
Accrued marketing 494
—
494
Interest payable 315
—
315
Other current liabilities 1,082
149
(a)(g) 1,231
Liabilities held for sale —
—
—
Total current liabilities 7,581
41
7,622
Long-term debt 30,998
(111 ) (b)(g) 30,887
Deferred income taxes 14,215
9
(a)(e)(g) 14,224
Accrued postemployment costs 394
—
394
Other non-current liabilities 964
71
(a) 1,035
TOTAL LIABILITIES 54,152
10
54,162
Commitments and Contingencies

Redeemable noncontrolling interest 6
—
6
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,222 shares issued and 1,219 shares outstanding at September 29, 2018) 12
—
12
Additional paid-in capital 58,793
(77 ) (d) 58,716
Retained earnings/(deficit) 8,576
(97 ) (a)(b)(d)(e)(f)(g) 8,479
Accumulated other comprehensive income/(losses) (1,732 ) 8
(b)(e)(f) (1,724 )
Treasury stock, at cost (3 shares at September 29, 2018) (264 ) —
(264 )
Total shareholders' equity 65,385
(166 ) 65,219
Noncontrolling interest 187
1
(g) 188
TOTAL EQUITY 65,572
(165 ) 65,407
TOTAL LIABILITIES AND EQUITY $ 119,730
$ (155 ) $ 119,575

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to income taxes receivable of $1 million, a decrease to other current assets of $36 million, an increase to other current liabilities of $66 million, a decrease to deferred income taxes of $40 million, an increase to other non-current liabilities of $71 million, and a decrease to retained earnings of $132 million at September 29, 2018.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, a decrease to property, plant and equipment, net, of $141 million, a decrease to current portion of long-term debt of $32 million, a decrease to long-term debt of $111 million, an increase to retained earnings of $2 million, and a decrease to accumulated other comprehensive losses of less than $1 million at September 29, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in a decrease to inventories of $67 million, an increase to other current assets of $67 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at September 29, 2018.

(e) Income Taxes—The correction of these misstatements resulted in an increase to income taxes receivable of $3 million, a decrease to other non-current assets of $10 million, an increase to deferred income taxes of $50 million, a decrease to retained earnings of $66 million, and a decrease to accumulated other comprehensive losses of $9 million at September 29, 2018.

(f) Impairments—The correction of these misstatements resulted in an increase to goodwill of $30 million, an increase to retained earnings of $31 million, and an increase to accumulated other comprehensive losses of $1 million at September 29, 2018.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of $4 million, a decrease to inventories of $6 million, a decrease to property, plant and equipment, net, of $1 million, an increase to goodwill of $1 million, a decrease to current portion of long-term debt of $2 million, a decrease to trade payables of $74 million, an increase to other current liabilities of $83 million, an increase to long-term debt of less than $1 million, a decrease to deferred income taxes of $1 million, a decrease to retained earnings of $9 million, and an increase to noncontrolling interest of $1 million at September 29, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 3,369
$ —
$ 3,369
Trade receivables (net of allowances of $24 at June 30, 2018) 1,950
—
1,950
Sold receivables 37
—
37
Income taxes receivable 177
34
(a)(b)(e)(g) 211
Inventories 3,161
(67 ) (d)(g) 3,094
Prepaid expenses 388
—
388
Other current assets 419
12
(a)(d)(g) 431
Assets held for sale —
—
—
Total current assets 9,501
(21 ) 9,480
Property, plant and equipment, net 7,258
(141 ) (b)(g) 7,117
Goodwill 44,270
32
(f)(g) 44,302
Intangible assets, net 59,101
(17 ) (f) 59,084
Other non-current assets 1,766
—
1,766
TOTAL ASSETS $ 121,896
$ (147 ) $ 121,749
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 34
$ —
$ 34
Current portion of long-term debt 2,754
(31 ) (b)(g) 2,723
Trade payables 4,326
(90 ) (g) 4,236
Accrued marketing 474
6
(g) 480
Interest payable 404
—
404
Other current liabilities 1,099
137
(a)(g) 1,236
Liabilities held for sale —
—
—
Total current liabilities 9,091
22
9,113
Long-term debt 31,380
(111 ) (b)(g) 31,269
Deferred income taxes 14,230
30
(a)(e)(f)(g) 14,260
Accrued postemployment costs 394
—
394
Other non-current liabilities 929
69
(a) 998
TOTAL LIABILITIES 56,024
10
56,034
Commitments and Contingencies

Redeemable noncontrolling interest 7
—
7
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,222 shares issued and 1,219 shares outstanding at June 30, 2018) 12
—
12
Additional paid-in capital 58,766
(77 ) (d) 58,689
Retained earnings/(deficit) 8,710
(86 ) (a)(b)(d)(e)(f)(g) 8,624
Accumulated other comprehensive income/(losses) (1,557 ) 6
(b)(e)(f) (1,551 )
Treasury stock, at cost (3 shares at June 30, 2018) (254 ) —
(254 )
Total shareholders' equity 65,677
(157 ) 65,520
Noncontrolling interest 188
—
188
TOTAL EQUITY 65,865
(157 ) 65,708
TOTAL LIABILITIES AND EQUITY $ 121,896
$ (147 ) $ 121,749

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to income taxes receivable of $1 million, a decrease to other current assets of $25 million, an increase to other current liabilities of $67 million, a decrease to deferred income taxes of $38 million, an increase to other non-current liabilities of $69 million, and a decrease to retained earnings of $122 million at June 30, 2018.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, a decrease to property, plant and equipment, net, of $139 million, a decrease to current portion of long-term debt of $29 million, a decrease to long-term debt of $111 million, an increase to retained earnings of $1 million, and an increase to accumulated other comprehensive losses of less than $1 million at June 30, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in a decrease to inventories of $65 million, an increase to other current assets of $65 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at June 30, 2018.

(e) Income Taxes—The correction of these misstatements resulted in an increase to income taxes receivable of $29 million, an increase to deferred income taxes of $73 million, a decrease to retained earnings of $51 million, and a decrease to accumulated other comprehensive losses of $7 million at June 30, 2018.

(f) Impairments—The correction of these misstatements resulted in an increase to goodwill of $31 million, a decrease to intangible assets, net of $17 million, a decrease to deferred income taxes of $4 million, an increase to retained earnings of $19 million, and an increase to accumulated other comprehensive losses of $1 million at June 30, 2018.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of $4 million, a decrease to inventories of $2 million, a decrease to other current assets of $28 million, a decrease to property, plant and equipment, net of $2 million, an increase to goodwill of $1 million, a decrease to current portion of long-term debt of $2 million, a decrease to trade payables of $90 million, an increase to accrued marketing of $6 million, an increase to other current liabilities of $70 million, an increase to long-term debt of less than $1 million, a decrease to deferred income taxes of $1 million, and a decrease to retained earnings of $10 million at June 30, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

March 31, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 1,794
$ —
$ 1,794
Trade receivables (net of allowances of $24 at March 31, 2018) 1,044
—
1,044
Sold receivables 530
—
530
Income taxes receivable 150
(29 ) (a)(b)(d)(e)(g) 121
Inventories 3,144
(55 ) (d)(g) 3,089
Prepaid expenses 367
—
367
Other current assets 408
18
(a)(d)(g) 426
Assets held for sale —
—
—
Total current assets 7,437
(66 ) 7,371
Property, plant and equipment, net 7,267
(122 ) (b)(g) 7,145
Goodwill 44,843
1
(g) 44,844
Intangible assets, net 59,600
(17 ) (f) 59,583
Other non-current assets 1,640
—
1,640
TOTAL ASSETS $ 120,787
$ (204 ) $ 120,583
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 1,001
$ 2
(g) $ 1,003
Current portion of long-term debt 2,742
(27 ) (b)(g) 2,715
Trade payables 4,241
(93 ) (g) 4,148
Accrued marketing 567
9
(g) 576
Interest payable 345
—
345
Other current liabilities 1,433
67
(a)(d)(e)(g) 1,500
Liabilities held for sale —
—
—
Total current liabilities 10,329
(42 ) 10,287
Long-term debt 28,561
(96 ) (b)(g) 28,465
Deferred income taxes 14,085
21
(a)(e)(f)(g) 14,106
Accrued postemployment costs 400
—
400
Other non-current liabilities 949
74
(a) 1,023
TOTAL LIABILITIES 54,324
(43 ) 54,281
Commitments and Contingencies

Redeemable noncontrolling interest 8
—
8
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,222 shares issued and 1,219 shares outstanding at March 31, 2018) 12
—
12
Additional paid-in capital 58,733
(77 ) (d) 58,656
Retained earnings/(deficit) 8,718
(84 ) (a)(b)(d)(e)(f)(g) 8,634
Accumulated other comprehensive income/(losses) (975 ) —
(b)(e) (975 )
Treasury stock, at cost (3 shares at March 31, 2018) (240 ) —
(240 )
Total shareholders' equity 66,248
(161 ) 66,087
Noncontrolling interest 207
—
207
TOTAL EQUITY 66,455
(161 ) 66,294
TOTAL LIABILITIES AND EQUITY $ 120,787
$ (204 ) $ 120,583

(a) Supplier Rebates—The correction of these misstatements resulted in a decrease to income taxes receivable of $1 million, a decrease to other current assets of $8 million, an increase to other current liabilities of $63 million, a decrease to deferred income taxes of $35 million, an increase to other non-current liabilities of $74 million, and a decrease to retained earnings of $111 million at March 31, 2018.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, a decrease to property, plant and equipment, net, of $120 million, a decrease to current portion of long-term debt of $25 million, a decrease to long-term debt of $96 million, an increase to retained earnings of $1 million, and a decrease to accumulated other comprehensive losses of less than $1 million at March 31, 2018.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in a decrease to income taxes receivable of $28 million, a decrease to inventories of $53 million, an increase other current assets of $53 million, a decrease to other current liabilities of $28 million, a decrease to additional paid-in capital of $77 million and an increase to retained earnings of $77 million at March 31, 2018.

(e) Income Taxes—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, a decrease to other current liabilities of $29 million, an increase to deferred income taxes of $59 million, a decrease to retained earnings of $30 million, and a decrease to accumulated other comprehensive losses of less than $1 million at March 31, 2018.

(f) Impairments—The correction of these misstatements resulted in a decrease to intangible assets, net of $17 million, a decrease to deferred income taxes of $4 million, and a decrease to retained earnings of $13 million at March 31, 2018.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of less than $1 million, a decrease to inventories of $2 million, a decrease to other current assets of $27 million, a decrease to property, plant and equipment, net of $2 million, an increase to goodwill of $1 million, an increase to commercial paper and other short term debt of $2 million, a decrease to current portion of long-term debt of $2 million, a decrease to trade payables of $93 million, an increase to accrued marketing of $9 million, an increase to other current liabilities of $61 million, an increase to long-term debt of less than $1 million, an increase to deferred income taxes of $1 million, and a decrease to retained earnings of $8 million at March 31, 2018.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 1,441
$ —
$ 1,441
Trade receivables (net of allowances of $29 at September 30, 2017) 938
—
938
Sold receivables 427
—
427
Income taxes receivable 328
(38 ) (a)(e)(g) 290
Inventories 3,188
(52 ) (d) 3,136
Prepaid expenses 368
—
368
Other current assets 538
(11 ) (a)(d) 527
Assets held for sale —
—
—
Total current assets 7,228
(101 ) 7,127
Property, plant and equipment, net 6,934
(32 ) (b)(g) 6,902
Goodwill 44,858
1
(g) 44,859
Intangible assets, net 59,500
(17 ) (f) 59,483
Other non-current assets 1,531
—
1,531
TOTAL ASSETS $ 120,051
$ (149 ) $ 119,902
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 455
$ 2
(g) $ 457
Current portion of long-term debt 2,755
(8 ) (b)(g) 2,747
Trade payables 3,947
(74 ) (g) 3,873
Accrued marketing 493
7
(g) 500
Interest payable 295
—
295
Other current liabilities 1,442
136
(a)(e)(g) 1,578
Liabilities held for sale —
—
—
Total current liabilities 9,387
63
9,450
Long-term debt 28,299
(23 ) (b)(g) 28,276
Deferred income taxes 20,898
(57 ) (a)(e)(f) 20,841
Accrued postemployment costs 1,808
—
1,808
Other non-current liabilities 688
27
(a) 715
TOTAL LIABILITIES 61,080
10
61,090
Commitments and Contingencies

Redeemable noncontrolling interest —
—
—
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,221 shares issued and 1,218 shares outstanding at September 30, 2017) 12
—
12
Additional paid-in capital 58,695
(77 ) (d) 58,618
Retained earnings/(deficit) 1,360
(80 ) (a)(d)(e)(f)(g) 1,280
Accumulated other comprehensive income/(losses) (1,085 ) (2 ) (e) (1,087 )
Treasury stock, at cost (3 shares at September 30, 2017) (223 ) —
(223 )
Total shareholders' equity 58,759
(159 ) 58,600
Noncontrolling interest 212
—
212
TOTAL EQUITY 58,971
(159 ) 58,812
TOTAL LIABILITIES AND EQUITY $ 120,051
$ (149 ) $ 119,902

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to income taxes receivable of $1 million, a decrease to other current assets of $63 million, an increase to other current liabilities of $39 million, a decrease to deferred income taxes of $45 million, an increase to other non-current liabilities of $27 million, and a decrease to retained earnings of $83 million at September 30, 2017.

(b) Capital Leases—The correction of these misstatements resulted in a decrease to property, plant and equipment, net, of $29 million, a decrease to current portion of long-term debt of $7 million, and a decrease to long-term debt of $22 million at September 30, 2017.

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in a decrease to inventories of $52 million, an increase other current assets of $52 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at September 30, 2017.

(e) Income Taxes—The correction of these misstatements resulted in a decrease to income taxes receivable of $48 million, a decrease in other current liabilities of less than $1 million, a decrease to deferred income taxes of $8 million, a decrease to retained earnings of $38 million, and an increase to accumulated other comprehensive losses of $2 million at September 30, 2017.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of $9 million, a decrease to property, plant and equipment, net of $3 million, an increase to goodwill of $1 million, an increase to commercial paper and other short term debt of $2 million, a decrease to current portion of long-term debt of $1 million, a decrease to trade payables of $74 million, an increase to accrued marketing of $7 million, an increase to other current liabilities of $97 million, a decrease to long-term debt of $1 million, and a decrease to retained earnings of $23 million at September 30, 2017.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 1,445
$ —
$ 1,445
Trade receivables (net of allowances of $28 at July 1, 2017) 913
60
(d) 973
Sold receivables 521
(60 ) (d) 461
Income taxes receivable 277
(40 ) (a)(e)(g) 237
Inventories 3,065
(53 ) (d) 3,012
Prepaid expenses 359
—
359
Other current assets 528
19
(a)(d) 547
Assets held for sale —
—
—
Total current assets 7,108
(74 ) 7,034
Property, plant and equipment, net 6,808
(4 ) (g) 6,804
Goodwill 44,565
1
(g) 44,566
Intangible assets, net 59,400
(17 ) (f) 59,383
Other non-current assets 1,535
—
1,535
TOTAL ASSETS $ 119,416
$ (94 ) $ 119,322
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 1,090
$ —
$ 1,090
Current portion of long-term debt 19
—
(g) 19
Trade payables 3,888
(83 ) (g) 3,805
Accrued marketing 494
5
(g) 499
Interest payable 406
—
406
Other current liabilities 1,459
130
(a)(e)(g) 1,589
Liabilities held for sale —
—
—
Total current liabilities 7,356
52
7,408
Long-term debt 29,979
(1 ) (g) 29,978
Deferred income taxes 20,887
(47 ) (a)(e)(f) 20,840
Accrued postemployment costs 1,975
—
1,975
Other non-current liabilities 673
28
(a) 701
TOTAL LIABILITIES 60,870
32
60,902
Commitments and Contingencies

Redeemable noncontrolling interest —
—
—
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,221 shares issued and 1,218 shares outstanding at July 1, 2017) 12
—
12
Additional paid-in capital 58,674
(77 ) (d) 58,597
Retained earnings/(deficit) 1,178
(49 ) (a)(d)(e)(f)(g) 1,129
Accumulated other comprehensive income/(losses) (1,308 ) —
(e) (1,308 )
Treasury stock, at cost (3 shares at July 1, 2017) (223 ) —
(223 )
Total shareholders' equity 58,333
(126 ) 58,207
Noncontrolling interest 213
—
213
TOTAL EQUITY 58,546
(126 ) 58,420
TOTAL LIABILITIES AND EQUITY $ 119,416
$ (94 ) $ 119,322

(a) Supplier Rebates—The correction of these misstatements resulted in an increase to income taxes receivable of $1 million, a decrease to other current assets of $34 million, an increase to other current liabilities of $31 million, a decrease to deferred income taxes of $33 million, an increase to other non-current liabilities of $28 million, and a decrease to retained earnings of $59 million at July 1, 2017.

~~(b) Capital Leases—None.~~

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in an increase to trade receivables, net of $60 million, a decrease to sold receivables of $60 million, a decrease to inventories of $53 million, an increase other current assets of $53 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at July 1, 2017.

(e) Income Taxes—The correction of these misstatements resulted in a decrease to income taxes receivable of $48 million, an increase in other current liabilities of less than $1 million, a decrease to deferred income taxes of $10 million, a decrease to retained earnings of $38 million, and an increase to accumulated other comprehensive losses of less than $1 million at July 1, 2017.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of $7 million, a decrease to property, plant and equipment, net of $4 million, an increase to goodwill of $1 million, a decrease to current portion of long-term debt of less than $1 million, a decrease to trade payables of $83 million, an increase to accrued marketing of $5 million, an increase to other current liabilities of $99 million, a decrease to long-term debt of $1 million, and a decrease to retained earnings of $16 million at July 1, 2017.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Balance Sheet~~

~~(in millions, except per share data)~~

April 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
ASSETS
Cash and cash equivalents $ 3,242
$ —
$ 3,242
Trade receivables (net of allowances of $30 at April 1, 2017) 886
50
(d) 936
Sold receivables 588
(50 ) (d) 538
Income taxes receivable 270
(1 ) (a)(e)(g) 269
Inventories 3,151
(57 ) (d) 3,094
Prepaid expenses 349
—
349
Other current assets 389
222
(a)(d)(g) 611
Assets held for sale —
—
—
Total current assets 8,875
164
9,039
Property, plant and equipment, net 6,693
(4 ) (g) 6,689
Goodwill 44,300
1
(g) 44,301
Intangible assets, net 59,330
(17 ) (f) 59,313
Other non-current assets 1,604
—
1,604
TOTAL ASSETS $ 120,802
$ 144
$ 120,946
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ 909
$ —
$ 909
Current portion of long-term debt 2,023
(1 ) (g) 2,022
Trade payables 3,936
(78 ) (g) 3,858
Accrued marketing 599
2
(g) 601
Interest payable 346
—
346
Other current liabilities 1,570
335
(a)(e)(g) 1,905
Liabilities held for sale —
—
—
Total current liabilities 9,383
258
9,641
Long-term debt 29,748
(1 ) (g) 29,747
Deferred income taxes 20,910
(37 ) (a)(e)(f) 20,873
Accrued postemployment costs 2,016
—
2,016
Other non-current liabilities 801
50
(a)(g) 851
TOTAL LIABILITIES 62,858
270
63,128
Commitments and Contingencies

Redeemable noncontrolling interest —
—
—
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,220 shares issued and 1,218 shares outstanding at April 1, 2017) 12
—
12
Additional paid-in capital 58,642
(77 ) (d) 58,565
Retained earnings/(deficit) 750
(45 ) (a)(d)(e)(f)(g) 705
Accumulated other comprehensive income/(losses) (1,449 ) (4 ) (e) (1,453 )
Treasury stock, at cost (2 shares at April 1, 2017) (223 ) —
(223 )
Total shareholders' equity 57,732
(126 ) 57,606
Noncontrolling interest 212
—
212
TOTAL EQUITY 57,944
(126 ) 57,818
TOTAL LIABILITIES AND EQUITY $ 120,802
$ 144
$ 120,946

(a) Supplier Rebates—The correction of these misstatements resulted in a decrease to income taxes receivable of $1 million, a decrease to other current assets of $15 million, an increase to other current liabilities of $26 million, a decrease to deferred income taxes of $26 million, an increase to other non-current liabilities of $28 million, and a decrease to retained earnings of $44 million at April 1, 2017.

~~(b) Capital Leases—None.~~

~~(c) Customer Incentive Program Expense Misclassifications—None.~~

(d) Balance Sheet Misclassifications—The correction of these misstatements resulted in an increase to trade receivables, net of $50 million, a decrease to sold receivables of $50 million, a decrease to inventories of $57 million, an increase to other current assets of $57 million, a decrease to additional paid-in capital of $77 million, and an increase to retained earnings of $77 million at April 1, 2017.

(e) Income Taxes—The correction of these misstatements resulted in a decrease to income taxes receivable of less than $1 million, an increase in other current liabilities of $49 million, a decrease to deferred income taxes of $7 million, a decrease to retained earnings of $38 million, and an increase to accumulated other comprehensive losses of $4 million at April 1, 2017.

(g) Other—The correction of these misstatements resulted in an increase to income taxes receivable of less than $1 million, an increase to other current assets of $180 million, a decrease to property, plant and equipment, net of $4 million, an increase to goodwill of $1 million, a decrease to current portion of long-term debt of $1 million, a decrease to trade payables of $78 million, an increase to accrued marketing of $2 million, an increase to other current liabilities of $260 million, a decrease to long-term debt of $1 million, an increase to other non-current liabilities of $22 million, and a decrease to retained earnings of $27 million at April 1, 2017.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Nine Months Ended September 29, 2018~~

~~(in millions, except per share data)~~

Restatement Reference Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
As Previously Reported
Balance at December 30, 2017 $ 12
$ 58,711
$ 8,589
$ (1,054 ) $ (224 ) $ 207
$ 66,241
Net income/(loss) excluding redeemable noncontrolling interest —
—
2,379
—
—
6
2,385
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(678 ) —
(13 ) (691 )
Dividends declared-common stock ($1.875 per share) —
—
(2,286 ) —
—
—
(2,286 )
Cumulative effect of accounting standards adopted in the period —
—
(97 ) —
—
—
(97 )
Exercise of stock options, issuance of other stock awards, and other —
82
(9 ) —
(40 ) (13 ) 20
Balance at September 29, 2018 $ 12
$ 58,793
$ 8,576
$ (1,732 ) $ (264 ) $ 187
$ 65,572
Restatement Impacts
Balance at December 30, 2017 $ —
$ (77 ) $ (94 ) $ —
$ —
$ —
$ (171 )
Net income/(loss) excluding redeemable noncontrolling interest (a)(b)(e)(f)(g) —
—
(3 ) —
—
1
(2 )
Other comprehensive income/(loss) excluding redeemable noncontrolling interest (b)(e)(f) —
—
—
8
—
—
8
Dividends declared-common stock ($1.875 per share) —
—
—
—
—
—
—
Cumulative effect of accounting standards adopted in the period —
—
—
—
—
—
—
Exercise of stock options, issuance of other stock awards, and other —
—
—
—
—
—
—
Balance at September 29, 2018 $ —
$ (77 ) $ (97 ) $ 8
$ —
$ 1
$ (165 )
As Restated
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
2,376
—
—
7
2,383
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(670 ) —
(13 ) (683 )
Dividends declared-common stock ($1.875 per share) —
—
(2,286 ) —
—
—
(2,286 )
Cumulative effect of accounting standards adopted in the period —
—
(97 ) —
—
—
(97 )
Exercise of stock options, issuance of other stock awards, and other —
82
(9 ) —
(40 ) (13 ) 20
Balance at September 29, 2018 $ 12
$ 58,716
$ 8,479
$ (1,724 ) $ (264 ) $ 188
$ 65,407

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the nine months ended September 29, 2018 sections above.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Six Months Ended June 30, 2018~~

~~(in millions, except per share data)~~

Restatement Reference Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
As Previously Reported
Balance at December 30, 2017 $ 12
$ 58,711
$ 8,589
$ (1,054 ) $ (224 ) $ 207
$ 66,241
Net income/(loss) excluding redeemable noncontrolling interest —
—
1,749
—
—
5
1,754
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(503 ) —
(11 ) (514 )
Dividends declared-common stock ($1.25 per share) —
—
(1,524 ) —
—
—
(1,524 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
55
(9 ) —
(30 ) (13 ) 3
Balance at June 30, 2018 $ 12
$ 58,766
$ 8,710
$ (1,557 ) $ (254 ) $ 188
$ 65,865
Restatement Impacts
Balance at December 30, 2017 $ —
$ (77 ) $ (94 ) $ —
$ —
$ —
$ (171 )
Net income/(loss) excluding redeemable noncontrolling interest (a)(b)(e)(f)(g) —
—
8
—
—
—
8
Other comprehensive income/(loss) excluding redeemable noncontrolling interest (b)(e)(f) —
—
—
6
—
—
6
Dividends declared-common stock ($1.25 per share) —
—
—
—
—
—
—
Cumulative effect of accounting standards adopted in the period —
—
��
—
—
—
—
Exercise of stock options, issuance of other stock awards, and other —
—
—
—
—
—
—
Balance at June 30, 2018 $ —
$ (77 ) $ (86 ) $ 6
$ —
$ —
$ (157 )
As Restated
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
1,757
—
—
5
1,762
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
(497 ) —
(11 ) (508 )
Dividends declared-common stock ($1.25 per share) —
—
(1,524 ) —
—
—
(1,524 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
55
(9 ) —
(30 ) (13 ) 3
Balance at June 30, 2018 $ 12
$ 58,689
$ 8,624
$ (1,551 ) $ (254 ) $ 188
$ 65,708

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the six months ended June 30, 2018 sections above.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Three Months Ended March 31, 2018~~

~~(in millions, except per share data)~~

Restatement Reference Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Losses) Treasury Stock, at Cost Noncontrolling Interest Total Equity
As Previously Reported
Balance at December 30, 2017 $ 12
$ 58,711
$ 8,589
$ (1,054 ) $ (224 ) $ 207
$ 66,241
Net income/(loss) excluding redeemable noncontrolling interest —
—
993
—
—
5
998
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
79
—
(5 ) 74
Dividends declared-common stock ($0.625 per share) —
—
(762 ) —
—
—
(762 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
22
(7 ) —
(16 ) —
(1 )
Balance at March 31, 2018 $ 12
$ 58,733
$ 8,718
$ (975 ) $ (240 ) $ 207
$ 66,455
Restatement Impacts
Balance at December 30, 2017 $ —
$ (77 ) $ (94 ) $ —
$ —
$ —
$ (171 )
Net income/(loss) excluding redeemable noncontrolling interest (a)(b)(e)(f)(g) —
—
10
—
—
—
10
Other comprehensive income/(loss) excluding redeemable noncontrolling interest (b)(e) —
—
—
—
—
—
—
Dividends declared-common stock ($0.625 per share) —
—
—
—
—
—
—
Cumulative effect of accounting standards adopted in the period —
—
—
—
—
—
—
Exercise of stock options, issuance of other stock awards, and other —
—
—
—
—
—
—
Balance at March 31, 2018 $ —
$ (77 ) $ (84 ) $ —
$ —
$ —
$ (161 )
As Restated
Balance at December 30, 2017 $ 12
$ 58,634
$ 8,495
$ (1,054 ) $ (224 ) $ 207
$ 66,070
Net income/(loss) excluding redeemable noncontrolling interest —
—
1,003
—
—
5
1,008
Other comprehensive income/(loss) excluding redeemable noncontrolling interest —
—
—
79
—
(5 ) 74
Dividends declared-common stock ($0.625 per share) —
—
(762 ) —
—
—
(762 )
Cumulative effect of accounting standards adopted in the period —
—
(95 ) —
—
—
(95 )
Exercise of stock options, issuance of other stock awards, and other —
22
(7 ) —
(16 ) —
(1 )
Balance at March 31, 2018 $ 12
$ 58,656
$ 8,634
$ (975 ) $ (240 ) $ 207
$ 66,294

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the three months ended March 31, 2018 sections above.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Nine Months Ended September 30, 2017~~

~~(in millions, except per share data)~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Six Months Ended July 1, 2017~~

~~(in millions, except per share data)~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Condensed Consolidated Statement of Equity~~

~~For the Three Months Ended April 1, 2017~~

~~(in millions, except per share data)~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Nine Months Ended September 29, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 2,376
$ (2 ) (a)(b)(e)(f)(g) $ 2,374
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 736
(24 ) (b)(g) 712
Amortization of postretirement benefit plans prior service costs/(credits) (261 ) —
(261 )
Equity award compensation expense 44
—
44
Deferred income tax provision/(benefit) 96
8
(a)(e)(f)(g) 104
Postemployment benefit plan contributions (64 ) —
(64 )
Goodwill and intangible asset impairment losses 499
(48 ) (f) 451
Nonmonetary currency devaluation 131
—
131
Other items, net 36
(1 ) (a)(g) 35
Changes in current assets and liabilities:
Trade receivables (2,154 ) —
(2,154 )
Inventories (663 ) 18
(d)(g) (645 )
Accounts payable 145
(15 ) (g) 130
Other current assets (105 ) 2
(a)(d) (103 )
Other current liabilities 83
41
(a)(b)(e)(g) 124
Net cash provided by/(used for) operating activities 899
(21 ) 878
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,296
—
1,296
Capital expenditures (594 ) —
(594 )
Payments to acquire business, net of cash acquired (248 ) —
(248 )
Other investing activities, net 31
—
31
Net cash provided by/(used for) investing activities 485
—
485
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,727 ) 21
(b)(g) (2,706 )
Proceeds from issuance of long-term debt 2,990
—
2,990
Proceeds from issuance of commercial paper 2,485
—
2,485
Repayments of commercial paper (1,950 ) —
(1,950 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (2,421 ) —
(2,421 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net (35 ) —
(35 )
Net cash provided by/(used for) financing activities (1,658 ) 21
(1,637 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (128 ) —
(128 )
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (402 ) —
(402 )
Balance at beginning of period 1,769
—
1,769
Balance at end of period $ 1,367
$ —
$ 1,367
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 938
$ —
$ 938

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the nine months ended September 29, 2018 section above.~~

The misstatements in the capital leases misclassifications category resulted in a decrease to net cash flows provided by operating activities of $21 million and a decrease to net cash flows used for financing activities of $21 million for the nine months ended September 29, 2018.

The misstatements in the other misclassifications category resulted in a decrease to net cash flows provided by operating activities of less than $1 million and a decrease to net cash flows used for financing activities of less than $1 million for the nine months ended September 29, 2018.

~~No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the nine months ended September 29, 2018.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Six Months Ended June 30, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 1,748
$ 8
(a)(b)(e)(f)(g) $ 1,756
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 476
(14 ) (b)(g) 462
Amortization of postretirement benefit plans prior service costs/(credits) (183 ) —
(183 )
Equity award compensation expense 27
—
27
Deferred income tax provision/(benefit) 58
21
(a)(e)(f)(g) 79
Postemployment benefit plan contributions (60 ) —
(60 )
Goodwill and intangible asset impairment losses 265
(31 ) (f) 234
Nonmonetary currency devaluation 67
—
67
Other items, net 59
(32 ) (a)(g) 27
Changes in current assets and liabilities:
Trade receivables (2,001 ) —
(2,001 )
Inventories (440 ) 12
(d)(g) (428 )
Accounts payable 143
(16 ) (g) 127
Other current assets (66 ) 22
(a)(d)(g) (44 )
Other current liabilities 136
17
(a)(b)(e)(g) 153
Net cash provided by/(used for) operating activities 229
(13 ) 216
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,221
—
1,221
Capital expenditures (438 ) —
(438 )
Payments to acquire business, net of cash acquired (215 ) —
(215 )
Other investing activities, net 11
—
11
Net cash provided by/(used for) investing activities 579
—
579
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (25 ) 13
(b)(g) (12 )
Proceeds from issuance of long-term debt 2,990
—
2,990
Proceeds from issuance of commercial paper 1,525
—
1,525
Repayments of commercial paper (1,950 ) —
(1,950 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (1,659 ) —
(1,659 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net (3 ) —
(3 )
Net cash provided by/(used for) financing activities 878
13
891
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (80 ) —
(80 )
Cash, cash equivalents, and restricted cash
Net increase/(decrease) 1,606
—
1,606
Balance at beginning of period 1,769
—
1,769
Balance at end of period $ 3,375
$ —
$ 3,375
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 899
$ —
$ 899

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the six months ended June 30, 2018 section above.~~

The misstatements in the capital leases misclassifications category resulted in a decrease to net cash flows provided by operating activities of $13 million and an increase to net cash flows provided by financing activities of $13 million for the six months ended June 30, 2018.

The misstatements in the other misclassifications category resulted in a decrease to net cash flows provided by operating activities of less than $1 million and an increase to net cash flows provided by financing activities of less than $1 million for the six months ended June 30, 2018.

~~No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the six months ended June 30, 2018.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Three Months Ended March 31, 2018
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 993
$ 10
(a)(b)(e)(f)(g) $ 1,003
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 234
(7 ) (b)(g) 227
Amortization of postretirement benefit plans prior service costs/(credits) (106 ) —
(106 )
Equity award compensation expense 7
—
7
Deferred income tax provision/(benefit) (47 ) 1
(a)(e)(f) (46 )
Postemployment benefit plan contributions (22 ) —
(22 )
Goodwill and intangible asset impairment losses —
—
(f) —
Nonmonetary currency devaluation 47
—
47
Other items, net 5
(27 ) (a)(g) (22 )
Changes in current assets and liabilities:
Trade receivables (712 ) —
(712 )
Inventories (312 ) —
(d)(g) (312 )
Accounts payable (69 ) (16 ) (g) (85 )
Other current assets 9
17
(a)(d)(g) 26
Other current liabilities 386
17
(a)(b)(e)(g) 403
Net cash provided by/(used for) operating activities 413
(5 ) 408
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 436
—
436
Capital expenditures (223 ) —
(223 )
Payments to acquire business, net of cash acquired (215 ) —
(215 )
Other investing activities, net 6
—
6
Net cash provided by/(used for) investing activities 4
—
4
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (11 ) 5
(b)(g) (6 )
Proceeds from issuance of long-term debt —
—
—
Proceeds from issuance of commercial paper 1,524
—
1,524
Repayments of commercial paper (1,006 ) —
(1,006 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (897 ) —
(897 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net 14
—
14
Net cash provided by/(used for) financing activities (376 ) 5
(371 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (10 ) —
(10 )
Cash, cash equivalents, and restricted cash
Net increase/(decrease) 31
—
31
Balance at beginning of period 1,769
—
1,769
Balance at end of period $ 1,800
$ —
$ 1,800
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 613
$ —
$ 613

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the three months ended March 31, 2018 section above.~~

The misstatements in the capital leases misclassifications category resulted in a decrease to net cash flows provided by operating activities of $5 million and a decrease to net cash flows used for financing activities of $5 million for the three months ended March 31, 2018.

~~No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the three months ended March 31, 2018.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Nine Months Ended September 30, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 2,994
$ (44 ) (a)(e)(f)(g) $ 2,950
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 790
(1 ) (g) 789
Amortization of postretirement benefit plans prior service costs/(credits) (247 ) —
(247 )
Equity award compensation expense 36
—
36
Deferred income tax provision/(benefit) 492
(60 ) (a)(e)(f) 432
Postemployment benefit plan contributions (283 ) —
(283 )
Goodwill and intangible asset impairment losses 49
—
(f) 49
Nonmonetary currency devaluation 36
—
36
Other items, net (52 ) (10 ) (a)(g) (62 )
Changes in current assets and liabilities:
Trade receivables (2,061 ) —
(2,061 )
Inventories (580 ) 13
(d) (567 )
Accounts payable 123
—
123
Other current assets (137 ) 47
(a)(d) (90 )
Other current liabilities (1,144 ) 54
(a)(g)(e) (1,090 )
Net cash provided by/(used for) operating activities 16
(1 ) 15
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,633
—
1,633
Capital expenditures (956 ) —
(956 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 47
(2 ) (g) 45
Net cash provided by/(used for) investing activities 724
(2 ) 722
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,636 ) 1
(g) (2,635 )
Proceeds from issuance of long-term debt 1,496
—
1,496
Proceeds from issuance of commercial paper 5,495
—
5,495
Repayments of commercial paper (5,709 ) —
(5,709 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (2,161 ) —
(2,161 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net 26
2
(g) 28
Net cash provided by/(used for) financing activities (3,489 ) 3
(3,486 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 43
—
43
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (2,706 ) —
(2,706 )
Balance at beginning of period 4,255
—
4,255
Balance at end of period $ 1,549
$ —
$ 1,549
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 1,936
$ —
$ 1,936

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the nine months ended September 30, 2017 section above.~~

The misstatements in the other misclassification category resulted in a decrease to net cash flows provided by operating activities of $1 million, a decrease to net cash flows provided by investing activities of $2 million, and a decrease to net cash flows used for financing activities of $3 million for the nine months ended September 30, 2017.

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Six Months Ended July 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 2,051
$ (13 ) (a)(e)(f)(g) $ 2,038
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 517
—
(g) 517
Amortization of postretirement benefit plans prior service costs/(credits) (171 ) —
(171 )
Equity award compensation expense 24
—
24
Deferred income tax provision/(benefit) 269
(46 ) (a)(e)(f) 223
Postemployment benefit plan contributions (90 ) —
(90 )
Goodwill and intangible asset impairment losses 48
—
(f) 48
Nonmonetary currency devaluation 33
—
33
Other items, net (31 ) (17 ) (a)(g) (48 )
Changes in current assets and liabilities:
Trade receivables (1,598 ) —
(1,598 )
Inventories (431 ) 13
(d) (418 )
Accounts payable 84
—
84
Other current assets (121 ) 18
(a)(d) (103 )
Other current liabilities (762 ) 45
(a)(g)(e) (717 )
Net cash provided by/(used for) operating activities (178 ) —
(178 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 1,069
—
1,069
Capital expenditures (690 ) —
(690 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 44
—
44
Net cash provided by/(used for) investing activities 423
—
423
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (2,032 ) —
(g) (2,032 )
Proceeds from issuance of long-term debt 4
—
4
Proceeds from issuance of commercial paper 4,213
—
4,213
Repayments of commercial paper (3,777 ) —
(3,777 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (1,434 ) —
(1,434 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net 15
—
15
Net cash provided by/(used for) financing activities (3,011 ) —
(3,011 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 29
—
29
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (2,737 ) —
(2,737 )
Balance at beginning of period 4,255
—
4,255
Balance at end of period $ 1,518
$ —
$ 1,518
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 1,407
$ —
$ 1,407

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the six months ended July 1, 2017 section above.~~

~~No misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the six months ended July 1, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

~~The Kraft Heinz Company~~

~~Consolidated Statement of Cash Flows~~

~~(in millions)~~

For the Three Months Ended April 1, 2017
As Previously Reported Restatement Impacts Restatement Reference As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 891
$ (10 ) (a)(e)(f)(g) $ 881
Adjustments to reconcile net income/(loss) to operating cash flows:

Depreciation and amortization 262
—
(g) 262
Amortization of postretirement benefit plans prior service costs/(credits) (82 ) —
(82 )
Equity award compensation expense 11
—
11
Deferred income tax provision/(benefit) 105
(37 ) (a)(e)(f) 68
Postemployment benefit plan contributions (38 ) —
(38 )
Goodwill and intangible asset impairment losses —
—
(f) —
Nonmonetary currency devaluation 8
—
8
Other items, net 35
5
(a) 40
Changes in current assets and liabilities:
Trade receivables (1,040 ) —
(1,040 )
Inventories (492 ) 17
(d) (475 )
Accounts payable 62
—
62
Other current assets (67 ) (5 ) (a)(d) (72 )
Other current liabilities (270 ) 30
(a)(g)(e) (240 )
Net cash provided by/(used for) operating activities (615 ) —
(615 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash receipts on sold receivables 464
—
464
Capital expenditures (368 ) —
(368 )
Payments to acquire business, net of cash acquired —
—
—
Other investing activities, net 38
—
38
Net cash provided by/(used for) investing activities 134
—
134
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (27 ) —
(g) (27 )
Proceeds from issuance of long-term debt 2
—
2
Proceeds from issuance of commercial paper 2,324
—
2,324
Repayments of commercial paper (2,068 ) —
(2,068 )
Dividends paid - Series A Preferred Stock —
—
—
Dividends paid - common stock (736 ) —
(736 )
Redemption of Series A Preferred Stock —
—
—
Other financing activities, net —
—
—
Net cash provided by/(used for) financing activities (505 ) —
(505 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 13
—
13
Cash, cash equivalents, and restricted cash
Net increase/(decrease) (973 ) —
(973 )
Balance at beginning of period 4,255
—
4,255
Balance at end of period $ 3,282
$ —
$ 3,282
NON-CASH INVESTING ACTIVITIES:
Beneficial interest obtained in exchange for securitized trade receivables $ 880
$ —
$ 880

~~See descriptions of the net income impacts in the condensed consolidated statement of income for the three months ended April 1, 2017 section above.~~

~~No misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the three months ended April 1, 2017.~~

~~See Note 2,~~ ~~Restatement of Previously Issued Consolidated Financial Statements, for a description of the misstatements in each category of restatements referenced by (a) through (g).~~

The following tables represent restated Segment Adjusted EBITDA for the interim periods within fiscal years 2018 and 2017. Management uses Segment Adjusted EBITDA to evaluate segment performance and allocate resources. See Note 22, ~~Segment Reporting, for the definition of Segment Adjusted EBITDA.~~

As Restated
December 29, 2018 September 29,
2018 June 30,
2018 March 31,
2018
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
(in millions)
Segment Adjusted EBITDA:
United States $ 1,249
$ 1,176
$ 3,969
$ 1,401
$ 2,793
$ 1,392
Canada 157
144
451
173
307
134
EMEA 171
165
553
206
388
182
Rest of World 130
148
505
213
357
144
General corporate expenses (33 ) (39 ) (128 ) (44 ) (89 ) (45 )
Depreciation and amortization (excluding integration and restructuring expenses) (240 ) (245 ) (679 ) (235 ) (434 ) (199 )
Integration and restructuring expenses (82 ) (32 ) (215 ) (93 ) (183 ) (90 )
Deal costs (4 ) (3 ) (19 ) (7 ) (16 ) (9 )
Unrealized gains/(losses) on commodity hedges (10 ) (6 ) (11 ) (3 ) (5 ) (2 )
Impairment losses (15,485 ) (217 ) (451 ) (234 ) (234 ) —
Gains/(losses) on sale of business —
—
(15 ) (15 ) (15 ) —
Equity award compensation expense (excluding integration and restructuring expenses) 11
(17 ) (44 ) (20 ) (27 ) (7 )
Operating income/(loss) (14,136 ) 1,074
3,916
1,342
2,842
1,500
Interest expense 325
326
959
316
633
317
Other expense/(income), net 13
(71 ) (196 ) (35 ) (125 ) (90 )
Income/(loss) before income taxes $ (14,474 ) $ 819
$ 3,153
$ 1,061
$ 2,334
$ 1,273

As Restated & Recast
December 30, 2017 September 30,
2017 July 1,
2017 April 1,
2017
Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Six Months Ended Three Months Ended
(in millions)
Segment Adjusted EBITDA:
United States $ 1,486
$ 1,407
$ 4,387
$ 1,534
$ 2,980
$ 1,446
Canada 159
159
477
189
318
129
EMEA 174
179
499
182
320
138
Rest of World 142
134
448
170
314
144
General corporate expenses (14 ) (29 ) (94 ) (36 ) (65 ) (29 )
Depreciation and amortization (excluding integration and restructuring expenses) (224 ) (243 ) (683 ) (219 ) (440 ) (221 )
Integration and restructuring expenses (208 ) (108 ) (375 ) (132 ) (267 ) (135 )
Unrealized gains/(losses) on commodity hedges 5
5
(24 ) 13
(29 ) (42 )
Impairment losses —
(1 ) (49 ) (48 ) (48 ) —
Equity award compensation expense (excluding integration and restructuring expenses) (11 ) (12 ) (38 ) (14 ) (26 ) (12 )
Operating income/(loss) 1,509
1,491
4,548
1,639
3,057
1,418
Interest expense 308
306
926
307
620
313
Other expense/(income), net (116 ) (127 ) (511 ) (254 ) (384 ) (130 )
Income/(loss) before income taxes $ 1,317
$ 1,312
$ 4,133
$ 1,586
$ 2,821
$ 1,235

~~Note 24. Supplemental Guarantor Information~~

~~Restatement of Previously Issued Condensed Consolidating Financial Statements~~

We have restated herein our previously issued condensed consolidating financial statements for fiscal years 2017 and 2016. Following the restated condensed consolidating financial statement tables, we have presented our condensed consolidating financial statements as previously reported for fiscal years 2017 and 2016, which were derived from our Annual Report on Form 10-K for the fiscal year ended December 30, 2017 filed on February 16, 2018. See Note 2, ~~Restatement of Previously Issued Consolidated Financial Statements, for additional information, including a description of the misstatements.~~

In addition, the statements of income for fiscal years 2017 and 2016, as previously reported, did not originally reflect the adoption of ASU 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). This ASU was adopted in the first quarter of 2018 and was applied retrospectively for statement of income presentation of service cost components and other net periodic benefit cost components. The condensed consolidating statements of income for fiscal years 2017 and 2016 have been recast accordingly. See Note 4, ~~New Accounting Standards~~Contingencies, for additional information related to our ~~adoption of ASU 2017-07.~~

~~Supplemental Guarantor Information~~

~~Kraft Heinz fully and unconditionally guarantees the notes issued by our 100% owned operating subsidiary, KHFC, including the New Notes. See Note 19,~~ ~~Debt, for additional descriptions of these guarantees. None of our other subsidiaries guarantee these notes.~~

Set forth below are the condensed consolidating financial statements presenting the results of operations, financial position, and cash flows of Kraft Heinz (as parent guarantor), KHFC (as subsidiary issuer of the notes), and the non-guarantor subsidiaries on a combined basis and eliminations necessary to arrive at the total reported information on a consolidated basis. This condensed consolidating financial information has been prepared and presented pursuant to the Securities and Exchange Commission Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or being Registered.” This information is not intended to present the financial position, results of operations, and cash flows of the individual companies or groups of companies in accordance with U.S. GAAP. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among the parent guarantor, subsidiary issuer, and the non-guarantor subsidiaries.

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Income~~

~~For the Year Ended December 29, 2018~~

~~(in millions)~~dissolved joint venture.

113

Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Net sales $ —
$ 17,317
$ 9,481
$ (530 ) $ 26,268
Cost of products sold —
11,290
6,587
(530 ) 17,347
Gross profit —
6,027
2,894
—
8,921
Selling, general and administrative expenses, excluding impairment losses —
803
2,402
—
3,205
Goodwill impairment losses —
—
7,008
—
7,008
Intangible asset impairment losses —
—
8,928
—
8,928
Selling, general and administrative expenses —
803
18,338
—
19,141
Intercompany service fees and other recharges —
3,865
(3,865 ) —
—
Operating income/(loss) —
1,359
(11,579 ) —
(10,220 )
Interest expense —
1,212
72
—
1,284
Other expense/(income), net —
(359 ) 176
—
(183 )
Income/(loss) before income taxes —
506
(11,827 ) —
(11,321 )
Provision for/(benefit from) income taxes —
112
(1,179 ) —
(1,067 )
Equity in earnings/(losses) of subsidiaries (10,192 ) (10,586 ) —
20,778
—
Net income/(loss) (10,192 ) (10,192 ) (10,648 ) 20,778
(10,254 )
Net income/(loss) attributable to noncontrolling interest —
—
(62 ) —
(62 )
Net income/(loss) excluding noncontrolling interest $ (10,192 ) $ (10,192 ) $ (10,586 ) $ 20,778
$ (10,192 )

Comprehensive income/(loss) excluding noncontrolling interest $ (11,081 ) $ (11,081 ) $ (11,550 ) $ 22,631
$ (11,081 )

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Income~~

~~For the Year Ended December 30, 2017~~

~~(in millions)~~

As Restated & Recast
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Net sales $ —
$ 17,397
$ 9,247
$ (568 ) $ 26,076
Cost of products sold —
11,147
6,464
(568 ) 17,043
Gross profit —
6,250
2,783
—
9,033
Selling, general and administrative expenses, excluding impairment losses —
695
2,232
—
2,927
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
49
—
49
Selling, general and administrative expenses —
695
2,281
—
2,976
Intercompany service fees and other recharges —
4,307
(4,307 ) —
—
Operating income/(loss) —
1,248
4,809
—
6,057
Interest expense —
1,189
45
—
1,234
Other expense/(income), net —
(535 ) (92 ) —
(627 )
Income/(loss) before income taxes —
594
4,856
—
5,450
Provision for/(benefit from) income taxes —
(243 ) (5,239 ) —
(5,482 )
Equity in earnings/(losses) of subsidiaries 10,941
10,104
—
(21,045 ) —
Net income/(loss) 10,941
10,941
10,095
(21,045 ) 10,932
Net income/(loss) attributable to noncontrolling interest —
—
(9 ) —
(9 )
Net income/(loss) excluding noncontrolling interest $ 10,941
$ 10,941
$ 10,104
$ (21,045 ) $ 10,941

Comprehensive income/(loss) excluding noncontrolling interest $ 11,516
$ 11,516
$ 7,711
$ (19,227 ) $ 11,516

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Income~~

~~For the Year Ended December 30, 2017~~

~~(in millions)~~

As Previously Reported
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Net sales $ —
$ 17,507
$ 9,293
$ (568 ) $ 26,232
Cost of products sold —
10,710
6,387
(568 ) 16,529
Gross profit —
6,797
2,906
—
9,703
Selling, general and administrative expenses, excluding impairment losses —
652
2,229
—
2,881
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
49
—
49
Selling, general and administrative expenses —
652
2,278
—
2,930
Intercompany service fees and other recharges —
4,308
(4,308 ) —
—
Operating income/(loss) —
1,837
4,936
—
6,773
Interest expense —
1,190
44
—
1,234
Other expense/(income), net —
(10 ) 19
—
9
Income/(loss) before income taxes —
657
4,873
—
5,530
Provision for/(benefit from) income taxes —
(221 ) (5,239 ) —
(5,460 )
Equity in earnings/(losses) of subsidiaries 10,999
10,121
—
(21,120 ) —
Net income/(loss) 10,999
10,999
10,112
(21,120 ) 10,990
Net income/(loss) attributable to noncontrolling interest —
—
(9 ) —
(9 )
Net income/(loss) excluding noncontrolling interest $ 10,999
$ 10,999
$ 10,121
$ (21,120 ) $ 10,999

Comprehensive income/(loss) excluding noncontrolling interest $ 11,573
$ 11,573
$ 7,726
$ (19,299 ) $ 11,573

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Income~~

~~For the Year Ended December 31, 2016~~

~~(in millions)~~

As Restated & Recast
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Net sales $ —
$ 17,652
$ 9,281
$ (633 ) $ 26,300
Cost of products sold —
11,359
6,428
(633 ) 17,154
Gross profit —
6,293
2,853
—
9,146
Selling, general and administrative expenses, excluding impairment losses —
1,053
2,474
—
3,527
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
18
—
18
Selling, general and administrative expenses —
1,053
2,492
—
3,545
Intercompany service fees and other recharges —
4,624
(4,624 ) —
—
Operating income/(loss) —
616
4,985
—
5,601
Interest expense —
1,076
58
—
1,134
Other expense/(income), net —
(230 ) (242 ) —
(472 )
Income/(loss) before income taxes —
(230 ) 5,169
—
4,939
Provision for/(benefit from) income taxes —
(414 ) 1,747
—
1,333
Equity in earnings/(losses) of subsidiaries 3,596
3,412
—
(7,008 ) —
Net income/(loss) 3,596
3,596
3,422
(7,008 ) 3,606
Net income/(loss) attributable to noncontrolling interest —
—
10
—
10
Net income/(loss) excluding noncontrolling interest $ 3,596
$ 3,596
$ 3,412
$ (7,008 ) $ 3,596

Comprehensive income/(loss) excluding noncontrolling interest $ 2,583
$ 2,583
$ 5,712
$ (8,295 ) $ 2,583

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Income~~

~~For the Year Ended December 31, 2016~~

~~(in millions)~~

As Previously Reported
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Net sales $ —
$ 17,809
$ 9,310
$ (632 ) $ 26,487
Cost of products sold —
11,156
6,377
(632 ) 16,901
Gross profit —
6,653
2,933
—
9,586
Selling, general and administrative expenses, excluding impairment losses —
970
2,474
—
3,444
Goodwill impairment losses —
—
—
—
—
Intangible asset impairment losses —
—
—
—
—
Selling, general and administrative expenses —
970
2,474
—
3,444
Intercompany service fees and other recharges —
4,624
(4,624 ) —
—
Operating income/(loss) —
1,059
5,083
—
6,142
Interest expense —
1,076
58
—
1,134
Other expense/(income), net —
144
(159 ) —
(15 )
Income/(loss) before income taxes —
(161 ) 5,184
—
5,023
Provision for/(benefit from) income taxes —
(372 ) 1,753
—
1,381
Equity in earnings/(losses) of subsidiaries 3,632
3,421
—
(7,053 ) —
Net income/(loss) 3,632
3,632
3,431
(7,053 ) 3,642
Net income/(loss) attributable to noncontrolling interest —
—
10
—
10
Net income/(loss) excluding noncontrolling interest $ 3,632
$ 3,632
$ 3,421
$ (7,053 ) $ 3,632

Comprehensive income/(loss) excluding noncontrolling interest $ 2,675
$ 2,675
$ 5,717
$ (8,392 ) $ 2,675

~~The Kraft Heinz Company~~

~~Condensed Consolidating Balance Sheets~~

~~As of December 29, 2018~~

~~(in millions)~~

Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Cash and cash equivalents $ —
$ 202
$ 928
$ —
$ 1,130
Trade receivables, net —
933
1,196
—
2,129
Receivables due from affiliates —
870
341
(1,211 ) —
Income taxes receivable —
701
9
(558 ) 152
Inventories —
1,783
884
—
2,667
Short-term lending due from affiliates —
1,787
3,753
(5,540 ) —
Prepaid expenses —
198
202
—
400
Other current assets —
776
445
—
1,221
Assets held for sale —
75
1,301
—
1,376
Total current assets —
7,325
9,059
(7,309 ) 9,075
Property, plant and equipment, net —
4,524
2,554
—
7,078
Goodwill —
11,067
25,436
—
36,503
Investments in subsidiaries 51,657
67,867
—
(119,524 ) —
Intangible assets, net —
3,010
46,458
—
49,468
Long-term lending due from affiliates —
—
2,000
(2,000 ) —
Other non-current assets —
316
1,021
—
1,337
TOTAL ASSETS $ 51,657
$ 94,109
$ 86,528
$ (128,833 ) $ 103,461
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ —
$ —
$ 21
$ —
$ 21
Current portion of long-term debt —
363
14
—
377
Short-term lending due to affiliates —
3,753
1,787
(5,540 ) —
Trade payables —
2,563
1,590
—
4,153
Payables due to affiliates —
341
870
(1,211 ) —
Accrued marketing —
282
440
—
722
Interest payable —
394
14
—
408
Other current liabilities —
888
1,437
(558 ) 1,767
Liabilities held for sale —
—
55
—
55
Total current liabilities —
8,584
6,228
(7,309 ) 7,503
Long-term debt —
29,872
898
—
30,770
Long-term borrowings due to affiliates —
2,000
12
(2,012 ) —
Deferred income taxes —
1,314
10,888
—
12,202
Accrued postemployment costs —
89
217
—
306
Other non-current liabilities —
593
309
—
902
TOTAL LIABILITIES —
42,452
18,552
(9,321 ) 51,683
Redeemable noncontrolling interest —
—
3
—
3
Total shareholders’ equity 51,657
51,657
67,855
(119,512 ) 51,657
Noncontrolling interest —
—
118
—
118
TOTAL EQUITY 51,657
51,657
67,973
(119,512 ) 51,775
TOTAL LIABILITIES AND EQUITY $ 51,657
$ 94,109
$ 86,528
$ (128,833 ) $ 103,461

~~The Kraft Heinz Company~~

~~Condensed Consolidating Balance Sheets~~

~~As of December 30, 2017~~

~~(in millions)~~

As Restated
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Cash and cash equivalents $ —
$ 509
$ 1,120
$ —
$ 1,629
Trade receivables, net —
91
830
—
921
Receivables due from affiliates —
716
240
(956 ) —
Dividends due from affiliates 135
—
—
(135 ) —
Sold receivables —
—
353
—
353
Income taxes receivable —
1,890
97
(1,449 ) 538
Inventories —
1,790
970
—
2,760
Short-term lending due from affiliates —
1,598
3,816
(5,414 ) —
Prepaid expenses —
168
177
—
345
Other current assets —
359
296
—
655
Total current assets 135
7,121
7,899
(7,954 ) 7,201
Property, plant and equipment, net —
4,591
2,470
—
7,061
Goodwill —
11,068
33,757
—
44,825
Investments in subsidiaries 65,863
80,345
—
(146,208 ) —
Intangible assets, net —
3,222
56,210
—
59,432
Long-term lending due from affiliates —
1,700
2,029
(3,729 ) —
Other non-current assets —
515
1,058
—
1,573
TOTAL ASSETS $ 65,998
$ 108,562
$ 103,423
$ (157,891 ) $ 120,092
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ —
$ 450
$ 12
$ —
$ 462
Current portion of long-term debt —
2,568
165
—
2,733
Short-term lending due to affiliates —
3,816
1,598
(5,414 ) —
Trade payables —
2,681
1,681
—
4,362
Payables due to affiliates —
240
716
(956 ) —
Accrued marketing —
236
453
—
689
Interest payable —
404
15
—
419
Dividends due to affiliates —
135
—
(135 ) —
Other current liabilities 135
565
2,238
(1,449 ) 1,489
Total current liabilities 135
11,095
6,878
(7,954 ) 10,154
Long-term debt —
27,422
886
—
28,308
Long-term borrowings due to affiliates —
2,029
1,919
(3,948 ) —
Deferred income taxes —
1,182
12,857
—
14,039
Accrued postemployment costs —
184
243
—
427
Other non-current liabilities —
787
301
—
1,088
TOTAL LIABILITIES 135
42,699
23,084
(11,902 ) 54,016
Redeemable noncontrolling interest —
—
6
—
6
Total shareholders’ equity 65,863
65,863
80,126
(145,989 ) 65,863
Noncontrolling interest —
—
207
—
207
TOTAL EQUITY 65,863
65,863
80,333
(145,989 ) 66,070
TOTAL LIABILITIES AND EQUITY $ 65,998
$ 108,562
$ 103,423
$ (157,891 ) $ 120,092

~~The Kraft Heinz Company~~

~~Condensed Consolidating Balance Sheets~~

~~As of December 30, 2017~~

~~(in millions)~~

As Previously Reported
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Cash and cash equivalents $ —
$ 509
$ 1,120
$ —
$ 1,629
Trade receivables, net —
91
830
—
921
Receivables due from affiliates —
716
207
(923 ) —
Dividends due from affiliates 135
—
—
(135 ) —
Sold receivables —
—
353
—
353
Income taxes receivable —
1,904
97
(1,419 ) 582
Inventories —
1,846
969
—
2,815
Short-term lending due from affiliates —
1,598
3,816
(5,414 ) —
Prepaid expenses —
168
177
—
345
Other current assets —
325
296
—
621
Total current assets 135
7,157
7,865
(7,891 ) 7,266
Property, plant and equipment, net —
4,577
2,543
—
7,120
Goodwill —
11,067
33,757
—
44,824
Investments in subsidiaries 66,034
80,426
—
(146,460 ) —
Intangible assets, net —
3,222
56,227
—
59,449
Long-term lending due from affiliates —
1,700
2,029
(3,729 ) —
Other non-current assets —
515
1,058
—
1,573
TOTAL ASSETS $ 66,169
$ 108,664
$ 103,479
$ (158,080 ) $ 120,232
LIABILITIES AND EQUITY
Commercial paper and other short-term debt $ —
$ 448
$ 12
$ —
$ 460
Current portion of long-term debt —
2,577
166
—
2,743
Short-term lending due to affiliates —
3,816
1,598
(5,414 ) —
Trade payables —
2,718
1,731
—
4,449
Payables due to affiliates —
207
716
(923 ) —
Accrued marketing —
236
444
—
680
Interest payable —
404
15
—
419
Dividends due to affiliates —
135
—
(135 ) —
Other current liabilities 135
473
2,192
(1,419 ) 1,381
Total current liabilities 135
11,014
6,874
(7,891 ) 10,132
Long-term debt —
27,442
891
—
28,333
Long-term borrowings due to affiliates —
2,029
1,919
(3,948 ) —
Deferred income taxes —
1,245
12,831
—
14,076
Accrued postemployment costs —
184
243
—
427
Other non-current liabilities —
716
301
—
1,017
TOTAL LIABILITIES 135
42,630
23,059
(11,839 ) 53,985
Redeemable noncontrolling interest —
—
6
—
6
Total shareholders’ equity 66,034
66,034
80,207
(146,241 ) 66,034
Noncontrolling interest —
—
207
—
207
TOTAL EQUITY 66,034
66,034
80,414
(146,241 ) 66,241
TOTAL LIABILITIES AND EQUITY $ 66,169
$ 108,664
$ 103,479
$ (158,080 ) $ 120,232

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Year Ended December 29, 2018~~

~~(in millions)~~

Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by/(used for) operating activities $ 3,183
$ 1,928
$ 656
$ (3,193 ) $ 2,574
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts on sold receivables —
—
1,296
—
1,296
Capital expenditures —
(339 ) (487 ) —
(826 )
Payments to acquire business, net of cash acquired —
(245 ) (3 ) —
(248 )
Net proceeds from/(payments on) intercompany lending activities —
1,626
206
(1,832 ) —
Additional investments in subsidiaries

(41 )

41
—
Return of capital 7
—
—
(7 ) —
Other investing activities, net —
31
35
—
66
Net cash provided by/(used for) investing activities 7
1,032
1,047
(1,798 ) 288
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt —
(2,550 ) (163 ) —
(2,713 )
Proceeds from issuance of long-term debt —
2,990
—
—
2,990
Proceeds from issuance of commercial paper —
2,784
—
—
2,784
Repayments of commercial paper —
(3,213 ) —
—
(3,213 )
Net proceeds from/(payments on) intercompany borrowing activities —
(206 ) (1,626 ) 1,832
—
Dividends paid-common stock (3,183 ) (3,183 ) (10 ) 3,193
(3,183 )
Other intercompany capital stock transactions —
(7 ) 41
(34 ) —
Other financing activities, net (7 ) (17 ) (4 ) —
(28 )
Net cash provided by/(used for) financing activities (3,190 ) (3,402 ) (1,762 ) 4,991
(3,363 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash —
—
(132 ) —
(132 )
Cash, cash equivalents, and restricted cash:
Net increase/(decrease) —
(442 ) (191 ) —
(633 )
Balance at beginning of period —
644
1,125
—
1,769
Balance at end of period $ —
$ 202
$ 934
$ —
$ 1,136

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Year Ended December 30, 2017~~

~~(in millions)~~

As Restated
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by/(used for) operating activities $ 2,888
$ 1,497
$ (996 ) $ (2,888 ) $ 501
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts on sold receivables —
—
2,286
—
2,286
Capital expenditures —
(757 ) (437 ) —
(1,194 )
Net proceeds from/(payments on) intercompany lending activities —
641
(542 ) (99 ) —
Additional investments in subsidiaries (21 ) —
—
21
—
Other investing activities, net —
62
23
—
85
Net cash provided by/(used for) investing activities (21 ) (54 ) 1,330
(78 ) 1,177
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt —
(2,628 ) (13 ) —
(2,641 )
Proceeds from issuance of long-term debt —
1,496
—
—
1,496
Proceeds from issuance of commercial paper —
6,043
—
—
6,043
Repayments of commercial paper —
(6,249 ) —
—
(6,249 )
Net proceeds from/(payments on) intercompany borrowing activities —
542
(641 ) 99
—
Dividends paid-common stock (2,888 ) (2,888 ) —
2,888
(2,888 )
Other intercompany capital stock transactions —
21
—
(21 ) —
Other financing activities, net 21
(5 ) 2
—
18
Net cash provided by/(used for) financing activities (2,867 ) (3,668 ) (652 ) 2,966
(4,221 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash —
—
57
—
57
Cash, cash equivalents, and restricted cash:
Net increase/(decrease) —
(2,225 ) (261 ) —
(2,486 )
Balance at beginning of period —
2,869
1,386
—
4,255
Balance at end of period $ —
$ 644
$ 1,125
$ —
$ 1,769

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Year Ended December 30, 2017~~

~~(in millions)~~

As Previously Reported
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by/(used for) operating activities $ 2,888
$ 1,499
$ (972 ) $ (2,888 ) $ 527
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts on sold receivables —
—
2,286
—
2,286
Capital expenditures —
(757 ) (460 ) —
(1,217 )
Net proceeds from/(payments on) intercompany lending activities —
641
(542 ) (99 ) —
Additional investments in subsidiaries (22 ) —
—
22
—
Other investing activities, net —
64
23
—
87
Net cash provided by/(used for) investing activities (22 ) (52 ) 1,307
(77 ) 1,156
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt —
(2,632 ) (12 ) —
(2,644 )
Proceeds from issuance of long-term debt —
1,496
—
—
1,496
Net proceeds from/(payments on) intercompany borrowing activities —
542
(641 ) 99
—
Proceeds from issuance of commercial paper —
6,043
—
—
6,043
Repayments of commercial paper —
(6,249 ) —
—
(6,249 )
Dividends paid-common stock (2,888 ) (2,888 ) —
2,888
(2,888 )
Other intercompany capital stock transactions —
22
—
(22 ) —
Other financing activities, net 22
(6 ) —
—
16
Net cash provided by/(used for) financing activities (2,866 ) (3,672 ) (653 ) 2,965
(4,226 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash —
—
57
—
57
Cash, cash equivalents, and restricted cash:
Net increase/(decrease) —
(2,225 ) (261 ) —
(2,486 )
Balance at beginning of period —
2,869
1,386
—
4,255
Balance at end of period $ —
$ 644
$ 1,125
$ —
$ 1,769

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Year Ended December 31, 2016~~

~~(in millions)~~

As Restated
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by/(used for) operating activities $ 3,096
$ 4,368
$ (1,704 ) $ (3,112 ) $ 2,648
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts on sold receivables —
—
2,589
—
2,589
Capital expenditures —
(923 ) (324 ) —
(1,247 )
Net proceeds from/(payments on) intercompany lending activities —
690
37
(727 ) —
Additional investments in subsidiaries —
(10 ) —
10
—
Return of capital 9,042
—
—
(9,042 ) —
Other investing activities, net —
129
(19 ) —
110
Net cash provided by/(used for) investing activities 9,042
(114 ) 2,283
(9,759 ) 1,452
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt —
(72 ) (13 ) —
(85 )
Proceeds from issuance of long-term debt —
6,978
3
—
6,981
Proceeds from issuance of commercial paper —
6,680
—
—
6,680
Repayments of commercial paper —
(6,043 ) —
—
(6,043 )
Net proceeds from/(payments on) intercompany borrowing activities —
(37 ) (690 ) 727
—
Dividends paid-Series A Preferred Stock (180 ) —
—
—
(180 )
Dividends paid-common stock (3,584 ) (3,764 ) (16 ) 3,780
(3,584 )
Redemption of Series A Preferred Stock (8,320 ) —
—
—
(8,320 )
Other intercompany capital stock transactions —
(8,374 ) 10
8,364
—
Other financing activities, net (54 ) (5 ) (10 ) —
(69 )
Net cash provided by/(used for) financing activities (12,138 ) (4,637 ) (716 ) 12,871
(4,620 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash —
—
(137 ) —
(137 )
Cash, cash equivalents, and restricted cash:
Net increase/(decrease) —
(383 ) (274 ) —
(657 )
Balance at beginning of period —
3,252
1,660
—
4,912
Balance at end of period $ —
$ 2,869
$ 1,386
$ —
$ 4,255

~~The Kraft Heinz Company~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the Year Ended December 31, 2016~~

~~(in millions)~~

As Previously Reported
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by/(used for) operating activities $ 3,097
$ 4,369
$ (1,705 ) $ (3,112 ) $ 2,649
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts on sold receivables —
—
2,589
—
2,589
Capital expenditures —
(923 ) (324 ) —
(1,247 )
Net proceeds from/(payments on) intercompany lending activities —
690
37
(727 ) —
Additional investments in subsidiaries 55
(10 ) —
(45 ) —
Return of capital 8,987
—
—
(8,987 ) —
Other investing activities, net —
129
(19 ) —
110
Net cash provided by/(used for) investing activities 9,042
(114 ) 2,283
(9,759 ) 1,452
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt —
(72 ) (14 ) —
(86 )
Proceeds from issuance of long-term debt —
6,978
3
—
6,981
Net proceeds from/(payments on) intercompany borrowing activities —
(37 ) (690 ) 727
—
Proceeds from issuance of commercial paper —
6,680
—
—
6,680
Repayments of commercial paper —
(6,043 ) —
—
(6,043 )
Dividends paid-Series A Preferred Stock (180 ) —
—
—
(180 )
Dividends paid-common stock (3,584 ) (3,764 ) (16 ) 3,780
(3,584 )
Redemption of Series A Preferred Stock (8,320 ) —
—
—
(8,320 )
Other intercompany capital stock transactions —
(8,374 ) 10
8,364
—
Other financing activities, net (55 ) (6 ) (8 ) —
(69 )
Net cash provided by/(used for) financing activities (12,139 ) (4,638 ) (715 ) 12,871
(4,621 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash —
—
(137 ) —
(137 )
Cash, cash equivalents, and restricted cash:
Net increase/(decrease) —
(383 ) (274 ) —
(657 )
Balance at beginning of period —
3,252
1,660
—
4,912
Balance at end of period $ —
$ 2,869
$ 1,386
$ —
$ 4,255

The following tables provide a reconciliation of cash and cash equivalents, as reported on our condensed consolidating balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidating statements of cash flows (in millions):

December 29, 2018
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Cash and cash equivalents $ —
$ 202
$ 928
$ —
$ 1,130
Restricted cash included in other current assets —
—
1
—
1
Restricted cash included in other non-current assets —
—
5
—
5
Cash, cash equivalents, and restricted cash $ —
$ 202
$ 934
$ —
$ 1,136

December 30, 2017
Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated
Cash and cash equivalents $ —
$ 509
$ 1,120
$ —
$ 1,629
Restricted cash included in other current assets —
135
5
—
140
Cash, cash equivalents, and restricted cash $ —
$ 644
$ 1,125
$ —
$ 1,769

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December ~~29, 2018.~~25, 2021. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer ~~have~~ concluded that ~~as of December 29, 2018, due to the existence of the material weaknesses in our internal control over financial reporting described below,~~ our disclosure controls and procedures, as of December 25, 2021, were ~~not~~ effective ~~to provide~~and provided reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

~~Management’s Report on Internal Control Over Financial Reporting~~

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those written policies and procedures that:

~~pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;~~

~~provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;~~

~~provide reasonable assurance that receipts and expenditures are being made only in accordance with management and director authorization; and~~

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 29, 2018 based on the framework described in ~~Internal Control - Integrated Framework~~ ~~(2013)~~issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 29, 2018 due to the material weaknesses described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We identified a material weakness in the risk assessment component of internal control as we did not appropriately design controls in response to the risk of misstatement due to changes in our business environment. This material weakness in risk assessment gave rise to the specific control deficiencies described below, which we also determined to be material weaknesses:

~~Supplier Contracts and Related Arrangements~~: We did not design and maintain effective controls over the accounting for supplier contracts and related arrangements. Specifically, certain employees in our procurement organization engaged in misconduct and circumvented controls that included withholding information or directing others to withhold information related to supplier contracts that affected the accounting for certain supplier rebates, incentives, and pricing arrangements, in an attempt to influence the achievement of internal financial targets that became or were perceived to have become increasingly difficult to attain due to changes in our business environment. Additionally, in certain instances, we did not have a sufficient understanding or maintain sufficient documentation of the transaction to determine the appropriate accounting for certain cost and rebate elements and embedded leases. This material weakness resulted in misstatements that were corrected in the restatement included in this Annual Report on Form 10-K.

~~Goodwill and Indefinite-lived Intangible Asset Impairment Testing~~: We did not design and maintain effective controls to reassess the level of precision used to review the impairment assessments related to goodwill and indefinite-lived intangible assets as changes in our business environment occurred. Specifically, we did not design and maintain effective controls to reassess the level of precision used in the review of the allocation of cash flow projections to certain brands used as a basis for performing our fourth quarter 2018 interim impairment assessments in response to the significant reduction in, and in certain instances elimination of, the excess fair value over carrying amount of certain brands that resulted from changes in our business environment. This material weakness did not result in a misstatement of any previously issued consolidated financial statements.

Additionally, the material weaknesses described above could result in a misstatement of the aforementioned account balances or disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected.

PricewaterhouseCoopers LLP, an independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of December 29, 2018, as stated in their report which appears herein under Item 8, ~~Financial Statements and Supplementary Data~~.

~~Remediation of Material Weaknesses~~

We are evaluating the material weaknesses and developing a plan of remediation to strengthen our internal controls related to our risk assessment component of internal control over financial reporting, supplier contracts and related arrangements, and the level of precision applied to the goodwill and indefinite-lived intangible asset impairment testing process. The remediation efforts summarized below, which are in the process of being implemented, are intended to address the identified material weaknesses and enhance our overall internal control environment.

Personnel Actions—A comprehensive disciplinary plan is in the process of being implemented for all employees found to have engaged in misconduct, including termination, written warnings, and appropriate training depending on the severity of the misconduct.

Performance Targets—We have identified and will be implementing several performance-based target enhancements as follows: (i) implementing checkpoints to evaluate significant changes in the environment that could adversely impact the attainability of management goals and targets; (ii) reassessing and adjusting the overall balance of performance measures provided to employees to help drive challenging but attainable targets; and (iii) enhancing our training and overall communication specific to the Management by Objective (“MBO”) process, including a focus on the process to request relief from previously established MBOs, to help ensure all eligible employees are aware of and understand the overall MBO waiver and relief process; (iv) reinforcing the importance of adherence to established internal controls and company policies and procedures through other formal communications, town hall meetings, and other employee trainings; and (v) reassessing certain employees’ key performance indicators.

Organizational Enhancements—We have identified and are in the process of implementing organizational enhancements as follows: (i) augmenting our procurement finance teams with additional professionals with the appropriate levels of accounting and controls knowledge, experience, and training in the area of supplier contracts and related arrangements; and (ii) realigning reporting lines whereby procurement finance now report directly to the finance organization.

Procurement Practices—We have evaluated our procurement practices and are in the process of implementing improvements to those practices, including: (i) developing more comprehensive contract approval policies and processes; (ii) enhancing required communication protocols among all functions involved in the procurement process (e.g., procurement, legal, accounting, and finance) to ensure all relevant parties are involved in the contract review process; (iii) standardizing contract documentation and analyses; and (iv) developing a more comprehensive accounting review process and monitoring controls over supplier contracts and related arrangements to ensure transactions are recorded in accordance with generally accepted accounting principles.

Training Practices—We are in the process of developing a comprehensive global procurement training program that will cover supplier contracts and related arrangements, including potential accounting implications. As part of this effort, we have held mandatory training for our global procurement function, which focused on our policies and procedures related to procurement, including the proper accounting for the contract terms that contributed to the material weakness.

Procurement Management Software—We have started to evaluate potential solutions to implement or upgrade the existing procurement management software to enhance the identification, tracking, and monitoring of supplier contracts and related arrangements.

Level of Precision Applied to Impairment Testing—We are in the process of implementing a plan to enhance the level of precision at which our internal controls over financial reporting relating to goodwill and indefinite-lived intangible asset impairment assessments are performed. Specifically, we will be implementing and executing additional procedures to (i)

~~enhance our analysis of forecasted cash flows used in the impairment assessment and (ii) test the accuracy of forecasted cash flow allocations to specific brands.~~

We believe the measures described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and have begun to implement some of the steps described above. We will also continue to review, optimize, and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies or we may modify certain of the remediation measures described above. These material weaknesses will not be considered remediated until the applicable remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer, with other members of management, evaluated the changes in our internal control over financial reporting during the ~~three months~~quarter ended December ~~29, 2018.~~25, 2021. We determined that there were no changes in our internal control over financial reporting during the ~~three months~~quarter ended December ~~29, 2018~~25, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;

•provide reasonable assurance that receipts and expenditures are being made only in accordance with management and director authorization; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the consolidated financial statements.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 25, 2021 based on the framework described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that we maintained effective internal control over financial reporting as of December 25, 2021.

PricewaterhouseCoopers LLP, an independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of December 25, 2021, as stated in their report which appears herein under Item 8, Financial Statements and Supplementary Data.

114

Item 9B. Other Information.

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

~~EXECUTIVE OFFICERS~~

Information ~~regarding executive officers~~required by this Item 10 is included ~~in Part I of this Annual Report on Form 10-K~~ under the caption “Information about our Executive ~~Officers.”~~

~~BOARD OF DIRECTORS~~

Officers” contained in Item 1, Business, of this report and under the headings Proposal 1.Election of Directors, Corporate Governance and ~~Director Nominees~~

~~The table below provides summary information about each director and each person nominated by the~~Board Matters—Codes of Conduct, Beneficial Ownership of Kraft Heinz Stock—Delinquent Section 16(a) Reports, Board ~~of Directors (the “Board”)~~Committees and Membership—Committee Structure and Membership, and Other Information—Stockholder Proposals in our definitive Proxy Statement for ~~election at~~ our ~~2019~~ Annual Meeting of Stockholders ~~(the “Annual Meeting”) as of June 5, 2019.~~

Name Age
Director
Since
Independent Audit Committee Compensation Committee Governance Committee Operations & Strategy Committee
Gregory E. Abel 57 2013 Yes X
Alexandre Behring (Chairman) 52 2013 Yes X Chair X
Joao M. Castro-Neves* 52 2019 Yes Chair X X
Tracy Britt Cool 34 2013 Yes X
John T. Cahill (Vice Chairman) 62 2015 No Chair
Feroz Dewan 42 2016 Yes X
Jeanne P. Jackson 67 2015 Yes X X X
Jorge Paulo Lemann 79 2013 Yes X X
John C. Pope 70 2015 Yes Chair X X
Alexandre Van Damme** 57 2018 Yes X
George Zoghbi 52 2018 No


*	As previously disclosed, Marcel Hermann Telles decided to retire from the Board. His retirement will become effective on June 12, 2019. The Board elected Mr. Castro-Neves, effective June 12, 2019, and appointed him to the Compensation Committee, the Nominating and Corporate Governance Committee (the “Governance Committee”), and the Operations and Strategy Committee, effective June 12, 2019.


**	~~The board appointed Mr. Van Damme to the Governance Committee, effective June 12, 2019.~~

~~Gregory E. Abel~~, age 56, has served on our Board since July 2015 and previously served on the Heinz board from June 2013 to July 2015. In January 2018, Mr. Abel was elected to the Board of Directors of Berkshire Hathaway Inc., a diversified holding company, and appointed as its Vice Chairman, Non-Insurance Business Operations. In connection with this election in January 2018, Mr. Abel became Executive Chairman of the Board of Directors of Berkshire Hathaway Energy Company and resigned as the company’s Chief Executive Officer and President, roles that he had held since 2008 and 1998, respectively. He had previously served as Chairman of Berkshire Hathaway Energy Company since 2011. Berkshire Hathaway Energy Company is a diversified global holding company that owns subsidiaries principally engaged in energy businesses in the United States, Canada, Great Britain, and the Philippines.

Until January 2018, Mr. Abel also served as Chairman, Chief Executive Officer, and Director of PacifiCorp, an electric power company, as Chairman, President, Chief Executive Officer and Director of CE Casecnan Ltd., a water and energy company, as Chairman and Director of Northern Natural Gas Company, a natural gas company, Northern Powergrid Holdings Company, an electric power company, and NV Energy, Inc., a public utility company, as Director of AltaLink Management Ltd., an electricity transmission company, as Director and Vice Chairman of Edison Electric Institute, an association of U.S. investor-owned electric companies, and as Director of Nuclear Electric Insurance Limited, a mutual insurance company of nuclear power facilities.

Mr. Abel serves as Director of HomeServices of America, Inc., a residential real estate brokerage firm, and as Director and Vice Chairman of Associated Electric & Gas Insurance Services, Inc., a managing general agent for a mutual insurance company.

Mr. Abel has experience as chief executive officer and director of multiple energy companies. Due to his service as a director in a highly-regulated industry and his management experience, he provides the Board with strong regulatory and operational skills, including international experience.

~~Alexandre Behring~~, age 52, has served on our Board as Chairman since July 2015 and previously served as Chairman of the Heinz board from June 2013 to July 2015. Mr. Behring is a Founding Partner and has been Managing Partner and a board member of 3G Capital, a global investment firm, since 2004. He also has served as the Executive Chairman of the Board of Directors of Restaurant Brands International Inc. (“RBI”), the parent company of Burger King, Popeyes, and Tim Hortons, quick service restaurant companies, since December 2014. Previously, he had served on the Board of Directors of Burger King Worldwide, Inc. and its predecessor as Chairman from October 2010 until December 2014. Mr. Behring also served as a Director of AB InBev, a multinational drink and brewing holdings company, from April 2014 to April 2019.

Previously, Mr. Behring spent 10 years at GP Investments, including eight years as a partner and member of the firm’s Investment Committee. He served for seven years, from 1998 through 2004, as Chief Executive Officer of ALL, one of Latin America’s largest railroad and logistics companies. He served as a Director of ALL until December 2011. From July 2008 to May 2011, Mr. Behring served as a Director of CSX Corporation, a U.S. rail-based transportation company.

Mr. Behring’s extensive leadership experience in developing and operating both public and private companies brings an important perspective and ability to lead and motivate. Mr. Behring’s qualifications and operational, financial, logistics, and strategic skills strengthen the Board’s collective knowledge and capacities.

~~Joao M. Castro-Neves~~, age 52, has served on our Board since June 2019. He has been a partner with 3G Capital since July 2018. Previously, Mr. Castro-Neves served as Chief Executive Officer of Anheuser-Busch, AB InBev’s North American unit, and Zone President, North America of AB InBev, from January 2015 until December 2017. Mr. Castro-Neves joined Companhia de Bebidas das Americas S.A. (“AMBEV”), a predecessor of AB InBev, in 1996 and served in positions of increasing responsibility, including Chief Financial Officer from January 2005 until December 2006 and Chief Executive Officer from January 2009 until December 2014. He has also served as Chief Executive Officer of Quilmes Industrial S.A., a subsidiary of AMBEV based in Argentina, from January 2007 until December 2008. Mr. Castro-Neves is also a director of RBI.

The Board has elected Mr. Castro-Neves because of his extensive experience in the consumer goods industry in his various positions with AB InBev as well as his public company directorship experience at RBI. In addition, when electing him, the Board considered his knowledge of strategy, finance, operations, mergers and acquisitions, and business development.

~~Tracy Britt Cool~~, age 34, has served on our Board since July 2015 and previously served on the Heinz board from June 2013 to July 2015. Ms. Cool has served as Chief Executive Officer of The Pampered Chef, a direct seller of high-quality cooking tools, since November 2014. Ms. Cool has been with Berkshire Hathaway, The Pampered Chef’s parent company, since she joined in December 2009 as Financial Assistant to the Chairman. Ms. Cool is currently the Chairman of Benjamin Moore & Co., a leading manufacturer and retailer of paints and architectural coatings, Chairman of Larson-Juhl, a manufacturer and distributor of wood and metal framing products, and Chairman of Oriental Trading Company, a direct merchant of party suppliers, arts and crafts, toys, and novelties. Ms. Cool is also a director of Blue Apron Holdings, Inc., an ingredient-and-recipe meal kit service.

Ms. Cool’s background as a senior leader of several consumer product companies provides her with a strong fundamental understanding related to our business. She also brings important insight into financial, marketing, product development, and other complex subjects.

~~John T. Cahill~~, age 62, has served on our Board as Vice Chairman since July 2015, prior to which he had served as Chairman and Chief Executive Officer of Kraft since December 2014. Mr. Cahill previously served as Kraft’s non-executive Chairman from March 2014 to December 2014. Prior to that, he served as Kraft’s Executive Chairman since October 2012. Mr. Cahill joined Mondelēz International, a food and beverage company and Kraft’s former parent, in January 2012 as the Executive Chairman Designate, North American Grocery, and served in that capacity until the spin-off of Kraft from Mondelēz International in October 2012. Prior to that, he served as an Industrial Partner at Ripplewood Holdings LLC, a private equity firm, from 2008 to 2011. Mr. Cahill spent nine years with The Pepsi Bottling Group, Inc., a beverage manufacturing company, most recently as Chairman and Chief Executive Officer from 2003 to 2006 and Executive Chairman until 2007. Mr. Cahill previously spent nine years with PepsiCo, Inc., a food and beverage company, in a variety of leadership positions. He currently serves as Lead Independent Director of American Airlines Group and is also a director at Colgate-Palmolive Company and a former director of Kraft and Legg Mason, Inc.

Mr. Cahill has extensive experience in the food and beverage industry, having served as Chairman and Chief Executive Officer of Kraft and in various key roles at other food and beverage companies. Mr. Cahill brings global leadership, operating, marketing, and product development experience, as well as insight into corporate governance, accounting, and financial subjects.

~~Feroz Dewan~~, age 42, has served on our Board since October 2016. Mr. Dewan is CEO of Arena Holdings Management LLC, an investment holding company. Previously, Mr. Dewan has served in several positions with Tiger Global Management, an investment firm with approximately $20 billion under management across public and private equity funds, from 2003 to 2015, including most recently as Head of Public Equities. He also served as a Private Equity Associate at Silver Lake Partners, a private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled, and related industries, from 2002 to 2003. Mr. Dewan has served as a Director of Fortive Corporation, a diversified industrial growth company, since July 2016.

Mr. Dewan has experience with technology and technology-related companies, including extensive experience in valuation, investments, financial reporting, capital allocation, operational oversight, and corporate governance.

~~Jeanne P. Jackson~~, age 67, has served on our Board since July 2015 and previously served on the Kraft Board of Directors from October 2012 to July 2015. Ms. Jackson served as President and Strategic Advisor, of NIKE, Inc., a designer, marketer, and distributor of athletic footwear, equipment, and accessories from June 2016 to August 2017, President, Product and Merchandising from July 2013 until April 2016, and President, Direct to Consumer from 2009 until July 2013. Prior to that, she founded and served as the Chief Executive Officer of MSP Capital, a private investment company, from 2002 to 2009, a role she returned to after retiring from NIKE, Inc. Before MSP, she served as Chief Executive Officer of Walmart.com, a private eCommerce enterprise, from 2000 to 2002. Ms. Jackson previously served in various leadership positions at Gap Inc., Victoria’s Secret, Saks Fifth Avenue, and Federated Department Stores, Inc., all clothing retailers, and Walt Disney Attractions, Inc., the theme parks and vacation resorts division of The Walt Disney Company, a mass media company. Ms. Jackson currently serves as a director of Delta Airlines, Inc. and McDonald’s Corporation and was formerly a director of Kraft.

As a former senior executive with several major consumer retailers and service as audit committee member of several public companies, Ms. Jackson brings knowledge of accounting and financial subjects as well as leadership, operating, and marketing experience.

~~Jorge Paulo Lemann~~, age 79, has served on our Board since July 2015 and previously served on the Heinz board from June 2013 to July 2015. Mr. Lemann is a Founding Partner and has been a board member of 3G Capital since 2004. Mr. Lemann founded and was Senior Partner of Banco de Investimentos Garantia S.A. in Brazil from 1971 through June 1998. He was also Chairman of the Latin American Advisory Committee of the New York Stock Exchange and formerly a Director of AB InBev. Mr. Lemann has been a member of JP Morgan International Council since 2012.

Mr. Lemann has experience as a director of a consumer products company and has strong international experience in the beverage industry. He also has broad knowledge of strategy, financial, investing, and business development.

~~John C. Pope~~, age 70, has served on our Board since July 2015 and previously served on the Kraft Board of Directors from August 2012 to July 2015. Mr. Pope has served as Chairman of PFI Group, LLC, a financial management firm, since 1994. Mr. Pope also serves as Chairman of the board of R.R. Donnelley and Sons Co., a marketing and business communication company, since May 2014, and from November 2004 to December 2011, he served as Chairman of the board of Waste Management, Inc., a provider of comprehensive waste management services. Mr. Pope also served as Chairman of the board of MotivePower Industries, Inc., a manufacturer and remanufacturer of locomotives and locomotive components, from December 1995 to November 1999. Prior to joining MotivePower Industries, Inc., Mr. Pope served in various capacities at United Airlines, a U.S.-based airline, and its parent, UAL Corporation, including as Director, Vice Chairman, President, Chief Operating Officer, Chief Financial Officer, and Executive Vice President, Marketing and Finance. Mr. Pope is currently Chairman of the board of R.R. Donnelley and Sons Co. and a director of Talgo S.A., a railcar manufacturer, and Waste Management, Inc. Mr. Pope was formerly a director of Con-way, Inc., Dollar Thrifty Automotive Group, Inc., Kraft, Mondelēz International, and Navistar International Corporation.

Mr. Pope has served as Chairman of a financial management firm and in several key leadership roles at global companies, including as Chief Financial Officer. Combined with his experience as an audit committee member of several public companies, Mr. Pope brings accounting and financial expertise, as well as leadership, operating, marketing, and international experience.

~~Alexandre Van Damme~~, age 57, has served on our Board since April 2018 and has served as a member of the board of RBI since December 2014. He previously served on the board of Burger King Worldwide, Inc. and its predecessor from December 2011 to December 2014. Mr. Van Damme has served as a member of the Board of Directors of AB InBev since 1992. He held various operational positions within Interbrew, a large Belgian-based brewing company until 1991. Mr. Van Damme was also a board member of Jacobs Douwe Egberts B.V., a global coffee and tea company, and its subsidiary Keurig Green Mountain through May 2018. He is also a director of DKMS, the largest bone marrow donor center in the world.

Mr. Van Damme’s long-term leadership at a large brewing company that is a major consumer brand gives him valuable expertise in business development, supply chain management, marketing, finance, risk assessment, and strategy.

~~George Zoghbi~~, age 52, has served on our Board since April 2018 and currently serves as a Special Advisor at Kraft Heinz, a role to which he transitioned in October 2017 after having served as our Chief Operating Officer of the U.S. Commercial business since the 2015 Merger. Mr. Zoghbi previously held key leadership roles at Kraft, including Chief Operating Officer from February 2015 until the 2015 Merger and, before that, as Vice Chairman, Operations, R&D, Sales and Strategy from June 2014 until February 2015, Executive Vice President and President, Cheese & Dairy and Exports from February 2013 until June 2014, and Executive Vice President and President, Cheese and Dairy from October 2012 to February 2013. Prior to that, he served as President, Cheese and Dairy at Mondelēz International. Prior to joining Kraft in 2007, Mr. Zoghbi held a number of roles with Fonterra Cooperative, a multinational dairy cooperative, and Associated British Foods, a multinational food processor and retailer. Mr. Zoghbi currently serves as a director of Brambles Limited, a global supply chain logistics company.

Mr. Zoghbi has a comprehensive understanding of, and a unique perspective on, the Kraft Heinz business and the food and beverage markets from his distinguished career at Kraft Heinz and Kraft. He served a key leadership role during the integration of Kraft and Heinz and has extensive experience of delivering on innovation, renovation, and new consumer trends.

~~CORPORATE GOVERNANCE AND BOARD MATTERS~~

~~Corporate Governance Guidelines~~

The Guidelines articulate our governance philosophy, practices, and policies in a range of areas, including: the Board’s role and responsibilities; the composition and structure of the Board; the establishment and responsibilities of the committees of the Board; executive and director performance evaluations; and succession planning. The Governance Committee reviews the Guidelines annually and recommends any changes to the Board.

~~Code of Business Conduct and Ethics for Non-Employee Directors and Code of Conduct for Employees~~

~~We have a written Code of Business Conduct and Ethics for Non-Employee Directors (the “Directors Ethics Code”) that is designed to deter wrongdoing and to promote:~~

~~honest and ethical conduct;~~

~~due care, diligence, and loyalty;~~

~~confidentiality of our proprietary information;~~

~~compliance with applicable laws, rules, and regulations, including insider trading compliance; and~~

~~accountability for adherence to the Directors Ethics Code and prompt internal reporting of violations.~~

~~Annually, each non-employee director acknowledges in writing that he or she has received, reviewed, and understands the Directors Ethics Code.~~

We also have a written Code of Conduct for employees (the “Code of Conduct”). The Code of Conduct includes a set of employee policies that cover ethical and legal practices for nearly every aspect of our business. The Code of Conduct reflects our values and contains important rules our employees must follow when conducting business to promote compliance and integrity. The Code of Conduct is part of our global compliance and integrity program that provides support and training throughout our Company and encourages reporting of wrongdoing by offering anonymous reporting options and a non-retaliation policy. We will disclose in the Corporate Governance section of our Web site (described below) any amendments to our Directors Ethics Code or Code of Conduct and any waiver granted to an executive officer or director under these codes.

~~Corporate Governance Materials Available on Our Web Site~~

~~Our Web site contains the Guidelines, our Board committee charters, the Code of Conduct, and the Directors Ethics Code. To view these documents, go to~~ ~~http://ir.kraftheinzcompany.com~~ and click on “Corporate Governance.” We will promptly deliver free of charge, upon request, a copy of the Guidelines, the Board committee charters, the Code of Conduct, or the Directors Ethics Code to any stockholder requesting a copy. Requests should be directed to our Corporate Secretary at The Kraft Heinz Company, 200 East Randolph Street, Suite 7600, Chicago, IL 60601.

~~The information on our Web site is not, and will not be deemed~~scheduled to be ~~a part of~~held on May 5, 2022 (“2022 Proxy Statement”). This information is incorporated by reference into this Annual Report on Form ~~10-K or incorporated by reference into any of our other filings with the SEC.~~10-K.

~~Delinquent Section 16(a) Reports~~

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock (collectively, the “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto filed electronically with the SEC by the Reporting Persons with respect to the fiscal year ended December 29, 2018, we believe that all filing requirements were complied with in a timely manner, except in two instances where Form 4s were inadvertently filed late on behalf of two directors to report certain transactions as follows: (i) in April 2018, to report three purchases of shares that were executed by the broker of one of our former directors, Mackey McDonald, on Mr. McDonald’s behalf without his knowledge or direction; and (ii) in June 2019, to report one transaction relating to the transfer of certain shares held in a trust for the benefit of Mr. Pope’s three adult children as a result of their election to exercise control over such shares in accordance with the terms of the trust that held these shares.

~~BOARD COMMITTEES AND MEMBERSHIP—AUDIT COMMITTEE~~

The Board established the Audit Committee in accordance with Section 3(a)(58)(A) and Rule 10A-3 under the Exchange Act. The Audit Committee consists entirely of independent directors, and each director meets the independence requirements set forth in the listing standards of Nasdaq, Rule 10A-3 under the Exchange Act and the Audit Committee charter. The Board has determined that each Audit Committee member is able to read and understand fundamental financial statements. In addition, the Board has determined that Ms. Jackson and Mr. Pope are “~~audit committee financial experts” within the meaning of SEC regulations. No Audit Committee member received any payments in 2018 from us other than compensation for service as a director.~~

~~BOARD COMMITTEES AND MEMBERSHIP—OPERATIONS AND STRATEGY COMMITTEE~~

Effective June 5, 2019, the Board established the Operations and Strategy Committee to assist it in overseeing and facilitating the development and implementation of our ongoing operations and corporate strategy. The Operations and Strategy Committee is led by John Cahill, Vice Chairman of the Board, and meets with management regularly to discuss, review and evaluate the development and implementation of our operational objectives and corporate strategy. The Operations and Strategy Committee is comprised of five directors appointed by the Board, based on nominations recommended to the Board by our Nominating and Corporate Governance Committee. Based on its review, the committee shares with management the Board’s expectations for the operations of the company and strategic planning process, makes recommendations to management on areas of improvement, and provides other feedback and guidance to management on behalf of the Board. The Operations and Strategy Committee’s responsibilities also include, among others, reviewing and making recommendations to the Board regarding:

~~our corporate strategy, performance, and annual capital plan, as well as certain individual capital projects;~~

the impact of external developments and factors, such as any changes in economic and market conditions, competition in the industry, environmental and safety regulations, federal, state and local regulations and technology, on our corporate strategy and its execution;

~~identification of prospects and opportunities for corporate developments and growth initiatives, including acquisitions, divestitures, joint ventures and strategic alliances; and~~

~~implementation of our corporate strategy through corporate developments and growth initiatives, including acquisitions, divestitures, joint ventures and strategic alliances.~~

Item 11. Executive Compensation.

~~BOARD COMMITTEES AND MEMBERSHIP—COMPENSATION COMMITTEE~~

Information required by this Item 11 is included under the headings Board Committees and Membership—Compensation Committee—Compensation Committee Interlocks and Insider Participation

~~The Board has determined that all of the directors who served on the~~, Director Compensation Committee during fiscal year 2018 are independent within the meaning of the Nasdaq listing standards. No member of the Compensation Committee is a current, or during fiscal year 2018 was, a former, officer, or employee of Heinz, Kraft, Kraft Heinz, or any of their subsidiaries. During fiscal year 2018, no member of the Compensation Committee had a relationship that must be described under the SEC rules relating to disclosure of “related person transactions” (for a description of our policy on “related person transactions,” see “Independence and Related Person Transactions”~~in Item 13,~~ ~~Certain Relationships and Related Transactions, and Director Independence~~). During fiscal year 2018, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee.

~~Analysis of Risk in the Compensation Architecture~~

Annually, the Compensation Committee evaluates the risk profile of our executive and broad-based employee compensation programs. In its evaluation for fiscal year 2018, the Compensation Committee reviewed our executive compensation structure as well as our overarching compensation systems to determine whether our compensation policies and practices encourage our executive officers or other employees to take unnecessary or excessive risks and whether these policies and practices properly mitigate risk. In addition, Willis Towers Watson advised management with respect to the risk assessment of our Performance Bonus Plan.

As described under “Compensation Discussion and Analysis,” our compensation structure is designed to incentivize executives and employees to achieve Kraft Heinz financial and strategic goals as well as individual performance goals that promote long-term stockholder returns. However, certain employees within our procurement organization engaged in misconduct and circumvented controls that included withholding information or directing others to withhold information related to supplier contracts that affected the accounting for certain supplier rebates, incentives, and pricing arrangements, in an attempt to influence the achievement of internal financial targets that became or were perceived to have become increasingly difficult to attain due to changes in our business environment. We are undertaking various remedial efforts outlined in Item 9A, ~~Controls and Procedures~~, and expect to revise the Performance Bonus Plan for 2019 to explicitly state applicable penalties such as score and/or percentage reductions and losses, up to and including ineligibility for and forfeiture of payments under the Performance Bonus Plan for misconduct. We also expect to revise the Performance Bonus Plan for 2019 to require that if the aforementioned misconduct is discovered after the payout under the Performance Bonus Plan, we would be entitled to seek equitable relief to recoup the amounts paid, including without limitation disgorgement, in addition to any other remedies under the law.

~~Compensation Committee Report~~

The Compensation Committee oversees our compensation programs on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis ~~included~~, Executive Compensation Tables, and Pay Ratio Disclosure in our 2022 Proxy Statement. This information is incorporated by reference into this Annual Report on Form 10-K. ~~In reliance on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.~~

~~Compensation Committee:~~

~~Alexandre Behring, Chair~~

~~Jorge Paulo Lemann~~

~~Marcel Herrmann Telles~~

~~COMPENSATION OF NON-EMPLOYEE DIRECTORS~~

Following the 2015 Merger, the Board approved our non-employee director compensation program, which was designed to be similar to the program in place at Kraft prior to the 2015 Merger. The table below summarizes the annual cash and equity compensation elements in place for our non-employee directors.



~~Compensation Element~~⁽¹⁾		~~Fee~~ ~~($)~~
~~Board Retainer~~		~~110,000~~
~~Chairman Retainer~~		~~250,000~~
~~Audit Committee Chair Retainer~~		~~20,000~~
~~Compensation Committee Chair Retainer~~		~~20,000~~
~~Governance Committee Chair Retainer~~		~~10,000~~
~~Operations and Strategy Committee Chair Retainer~~⁽²⁾		~~20,000~~
~~Stock Grant Value~~⁽³⁾		~~125,000~~


~~(1)~~	If a director serves as Chair of multiple committees, he or she receives fees for only one committee. Therefore, Mr. Behring does not receive a retainer for service as Chair of the Governance Committee.


~~(2)~~	Effective June 5, 2019, the Board established the Operations and Strategy Committee to assist it in overseeing and facilitating the development and implementation of our ongoing operations and corporate strategy. The Operations and Strategy Committee is led by John Cahill, Vice Chairman of the Board.

~~(3)~~

Non-employee directors are awarded Kraft Heinz deferred shares. Although the deferred shares are vested as of the award date, the shares are not distributed until six months following the date the non-employee director ceases to serve on our Board. When dividends are paid on our common stock, we accrue the value of the dividend paid and issue shares equal to the accrued value six months after the director’s departure.

Non-employee directors receive an annual stock award that is granted effective immediately following our annual meeting of stockholders. We also pay the non-employee directors cash retainers on a quarterly basis. Non-employee directors also have the option to (i) defer up to 100% of their cash retainers in 25% increments into accounts that mirror certain funds in the Kraft Heinz 401(k) Plan pursuant to the Deferred Compensation Plan for Non-Management Directors or (ii) receive deferred shares annually in lieu of their cash retainer payable in arrears.

Our stock ownership guidelines require non-employee directors who elect to receive compensation for service as directors to hold shares of our common stock in an amount equal to five times the annual Board retainer (equivalent to $550,000) within five years. As all of our current directors have served following the 2015 Merger for less than five years, they are not yet required to meet the stock ownership requirement. We feel strongly that our director compensation program significantly aligns our non-employee directors’ and stockholders’ interests.

For as long as Mr. Zoghbi continues to serve as a Special Advisor at Kraft Heinz, it is anticipated that he will not receive compensation for his services as a director. For a discussion of Mr. Zoghbi’s compensation arrangement, please see “Compensation Arrangement” in Item 13, ~~Certain Relationships and Related Transactions, and Director Independence~~.

~~The table below presents information regarding the compensation and stock awards that we have paid or granted to our non-employee directors.~~

~~2018 Non-Employee Director Compensation Table~~

Name⁽¹⁾

Fees Earned or
Paid in Cash⁽²⁾
($)

Stock Awards⁽³⁾
($)

All Other
Compensation
($)

Total
($)
Gregory E. Abel 110,054
125,050
—
235,104
Alexandre Behring 270,000
125,050
—
395,050
John T. Cahill⁽⁴⁾
110,000
125,050
500,000
735,050
Tracy Britt Cool 110,054
125,050
—
235,104
Feroz Dewan 110,054
125,050
—
235,104
Jeanne P. Jackson 110,000
125,050
—
235,050
Jorge Paulo Lemann 110,054
125,050
—
235,104
Mackey J. McDonald 34,451
—
—
34,451
John C. Pope 130,000
125,050
—
255,050
Marcel Herrmann Telles 110,000
125,050
—
235,050
Alexandre Van Damme 82,500
125,050
—
207,550

~~(1)~~

As noted above, Mr. Zoghbi is an employee of Kraft Heinz. For as long as Mr. Zoghbi continues to serve as a Special Advisor at Kraft Heinz, it is anticipated that he will not receive compensation for his services as a director. For a discussion of Mr. Zoghbi’s compensation arrangement, please see “Compensation Arrangement” in Item 13, ~~Certain Relationships and Related Transactions, and Director Independence~~.


~~(2)~~	Includes all retainer fees paid or deferred in exchange for shares pursuant to the Kraft Heinz Deferred Compensation Plan for Non-Management Directors. Non-employee directors do not receive meeting fees. In addition, Mr. Buffett elected to receive no compensation for his service as a director through the end of his term at the 2018 Annual Meeting.

~~(3)~~

The amounts shown in this column represent the full grant date fair value of the deferred stock awards granted in 2018, excluding any retainer fees deferred in exchange for shares, as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of Kraft Heinz shares on the grant date ($57.68 on April 23, 2018). The following table shows the aggregate number of stock options held by non-employee directors as of December 29, 2018:



	~~Name~~		~~Vested Stock Options~~
	~~Gregory E. Abel~~		~~22,166~~
	~~Alexandre Behring~~		~~44,333~~
	~~John T. Cahill~~		~~633,017~~
	~~Tracy Britt Cool~~		~~22,166~~
	~~Jorge Paulo Lemann~~		~~22,166~~
	~~Marcel Herrmann Telles~~		~~22,166~~

~~(4)~~

Mr. Cahill provides advisory and consulting services to Kraft Heinz related to current and historical finances, relationships with licensors, customers, and vendors, employee matters, product development, marketing and distribution, government affairs, and strategic opportunities. These services are provided pursuant to a consulting agreement entered into between Mr. Cahill and the Company in November 2017. Previously, these services were provided pursuant to an arrangement entered into following the 2015 Merger. Mr. Cahill’s services under the consulting agreement are distinct and separate from his duties as a director. Payments to Mr. Cahill under the consulting agreement are disclosed in the “All Other Compensation” column. For a discussion of the advisory and consulting services provided by Mr. Cahill to Kraft Heinz, please see “Consulting Agreement” in Item 13, ~~Certain Relationships and Related Transactions, and Director Independence~~.

~~COMPENSATION DISCUSSION AND ANALYSIS~~

~~Compensation Discussion and Analysis~~

This Compensation Discussion and Analysis, which we refer to as the “CD&A”, outlines the compensation philosophy and objectives of Kraft Heinz and describes our executive pay programs for fiscal year 2018 and, specifically, for the following Named Executive Officers (also referred to as “NEOs”):



~~Name~~		~~Title~~
~~Bernardo Hees~~		~~Chief Executive Officer~~
~~David Knopf~~		~~Executive Vice President and Chief Financial Officer~~
~~Paulo Basilio~~		~~Zone President of U.S.~~
~~Rafael Oliveira~~		~~Zone President of EMEA~~
~~Rashida La Lande~~		~~Senior Vice President, Global General Counsel and Head of CSR and Government Affairs; Corporate Secretary~~

~~Executive Summary~~

The Compensation Committee (the “Committee”) oversees our executive compensation plans and programs. Our programs are designed to complement each other to provide a clear link between what we pay our NEOs and Kraft Heinz’s performance over both short- and long-term periods. The overall program has been designed to accomplish each of the following goals:

~~Rewarding superior financial and operational performance;~~

~~Placing a significant portion of compensation at risk if performance goals are not achieved;~~

~~Aligning the interests of the NEOs with those of our stockholders; and~~

~~Enabling us to attract, retain, and motivate top talent.~~

Consistent with these goals and as described in further detail below, our compensation program has been designed with a view toward linking a significant portion of each NEO’s compensation to Company and individual performance and the growth in the value of Kraft Heinz.

~~Elements of Compensation Program~~

As noted above, our compensation program is based on a pay-for-performance philosophy. This section of the CD&A provides an overview of each element of our compensation program and describes both the process for determining such compensation and how such compensation relates to Kraft Heinz’s pay-for-performance philosophy and meritocratic principles. The following table summarizes the primary elements and objectives of our 2018 compensation program for executive officers, including our NEOs.



~~Element~~	~~Description~~	~~Primary Objectives~~
~~Base Salary~~	~~Ongoing cash compensation based on the executive officer’s role and responsibilities, individual job performance, and experience.~~	• ~~Recruitment and retention~~
~~Annual Cash Incentive (Performance Bonus Plan)~~	Annual incentive with target award amounts for each executive officer. Actual cash payouts are linked to achievement of annual Company goals and individual performance. For fiscal year 2018, payouts could range from 0%-130% of target depending on the relevant metric.	• ~~Drive top-tier performance~~ • ~~Incentivize and reward~~
~~Stock Options~~	~~Stock option awards that cliff vest after five years.~~	• ~~Drive top-tier performance~~ • ~~Align with stockholders’ interests~~ • ~~Link realized value entirely to stock price appreciation~~ • ~~Retention~~
~~Restricted Stock Units (“RSUs”)~~	~~RSUs that cliff vest after five years may be awarded pursuant to our annual Bonus Swap Program or individual agreements or separate grants with additional conditions.~~	• ~~Drive top-tier performance~~ • ~~Align with stockholders’ interests~~ • ~~Retention~~
~~Performance Share Units (“PSUs”)~~	Awards that are linked to achievement of multi-year profitability goals. The PSUs pay out in Kraft Heinz common stock after five years, depending on the achievement of the performance objectives and subject to the satisfaction of certain conditions.	• ~~Drive top-tier performance~~ • ~~Align with stockholders’ interests~~ • ~~Long-term value creation~~ • ~~Retention~~

~~Base Salary~~

Base salary is the principal “fixed” element of executive compensation at Kraft Heinz and for our NEOs. The Committee believes that it is important that each NEO receive a competitive marketplace base salary to provide an appropriate balance between fixed and variable compensation. The initial base salary of each NEO is established in connection with the hiring of such NEO. In establishing base salaries, Kraft Heinz reviews market-based survey data published by the Hay Group and select country-specific surveys, in each case, for informational purposes only. We do not formally benchmark compensation or target compensation levels at any particular percentile of the survey data. The Committee reviews salaries on an annual basis and generally makes any annual changes effective January 1^st. On occasion, Kraft Heinz may review and adjust an executive’s base salary during the course of the year to account for increased responsibilities, roles, and other factors. The Committee has sole responsibility for the review of Mr. Hees’s compensation. Mr. Hees has primary responsibility for the review of the compensation of his direct reports, including the other NEOs, and provides salary recommendations to the Committee.

~~The table below shows the annualized 2018 base salary for each NEO.~~



~~Name~~		~~Base Salary~~ ~~($)~~
~~Mr. Hees~~		~~1,000,000~~
~~Mr. Knopf~~		~~500,000~~
~~Mr. Basilio~~		~~750,000~~
~~Mr. Oliveira~~⁽¹⁾		~~560,101~~
~~Ms. La Lande~~⁽²⁾		~~650,000~~


~~(1)~~	Mr. Oliveira’s base salary is paid in British pounds. The amount shown in the table above is based on the following 12-month average exchange rate of 0.7499 USD/GBP. Mr. Oliveira’s base salary was increased effective January 1, 2018 in connection with the Committee’s annual base salary review process.


~~(2)~~	~~Ms. La Lande was hired on January 22, 2018.~~

We believe that the base salary review process serves our pay-for-performance philosophy, because base pay increases are generally merit-based and dependent on the NEO’s success and achievement in his or her role. In addition, each NEO’s target annual incentive award opportunity, as described below, is based on a percentage of his or her base salary. Therefore, as NEOs earn merit-based salary increases, their annual incentive award opportunities also increase proportionately.

~~Annual CashPerformance Bonus Plan~~

The Performance Bonus Plan (the “PBP”) is designed to motivate and reward employees who contribute positively toward our business strategy and achieve their individual performance objectives. For 2018, the formula for determining a PBP participant’s annual bonus payout was as follows (each item being described in more detail below):

~~Base Salary x Target Award x Financial Multiplier x Individual Rating = PBP Payout~~

Due to the difficult operating environment in 2018 and the Company’s financial performance, Messrs. Hees, Knopf, and Basilio asked to forfeit their rights to the amounts payable pursuant to the PBP with respect to fiscal year 2018, and the Committee approved their forfeitures.

~~Base Salary~~

For a description of our NEOs’ base salaries, please see “Base Salary” above. Because Ms. La Lande was hired on January 22, 2018, the base salary used for her PBP calculation was prorated to reflect her service for 11 months.

~~Target Award~~

Each NEO is granted a target award opportunity prior to the beginning of each year, which is set as a percentage of the NEO’s annual base salary: 300% for Mr. Hees, 175% for Mr. Knopf, 250% for Mr. Basilio, 175% for Mr. Oliveira, and 150% for Ms. La Lande. Due to the nature of Mr. Hees’s role and responsibilities and the significant nature of Mr. Basilio’s role as President of our largest business, their respective Target Award Opportunities were greater than the other NEOs, although, as noted above, due to the difficult operating environment in 2018 and the Company’s financial performance, Messrs. Hees, Knopf, and Basilio asked to forfeit their rights to the amounts payable pursuant to the PBP with respect to fiscal year 2018, and the Committee approved their forfeitures.

~~Financial Multiplier~~

Another component of a participant’s PBP calculation is the Company’s (or the relevant Zone’s or business unit’s) financial performance (“Financial Multiplier”). For 2018, the Financial Multiplier was initially designed to be based on Adjusted EBITDA performance and could have ranged from 0% to 150%, with performance between threshold and maximum levels resulting in a payout between 50% and 150%, and with performance below threshold resulting in no payout. In June 2018, our management team established a revised business plan for the second half of the 2018 fiscal year (the “2H Plan”). The 2H Plan was intended to drive net sales (“NSV”) growth by regaining distribution and building velocity to position the Company for long-term financial health and success. In June 2018, in order to (i) capture overall commercial, operational, and financial performance of the Company and (ii) incentivize management to deliver the 2H Plan to position the Company for long-term financial health and success, the Committee exercised its discretion under the PBP to include NSV and Adjusted Net Income as elements of the Financial Multiplier as described below. A participant’s final Financial Multiplier was calculated based on the metrics aligned to the 2H Plan. As described above, Messrs. Hees, Knopf, and Basilio forfeited their respective rights to the amounts payable pursuant to the PBP for 2018. For Mr. Oliveira and Ms. La Lande, the amounts payable calculated pursuant to the metrics aligned to the 2H Plan were greater than if they had been calculated using the metrics as initially designed.

For 2018, for participants evaluated based on global performance, including Messrs. Hees and Knopf and Ms. La Lande, the Financial Multiplier was calculated based on global change in Adjusted Net Income. If performance resulted between the threshold and maximum levels for Adjusted Net Income, the component multiplier would have ranged from 60% to 100%. If the threshold had not been met, the component multiplier would be 0%.

For participants evaluated based on Zone (operating segment) or business unit performance, including Messrs. Basilio and Oliveira, who were evaluated based on U.S. and EMEA Zone performance, respectively, the Financial Multiplier was calculated based 30% on global change in Adjusted Net Income and 70% based on their respective Zone or business unit financial performances. Zone and business unit financial performance was based 75% on change in NSV and 25% on change in Segment Adjusted EBITDA. If performance resulted between the threshold and target levels for NSV, the component multiplier would have ranged from 60% to 100%, depending on the Zone. If performance resulted between the threshold and maximum levels for Segment Adjusted EBITDA, the component multiplier would have ranged from 60% to 130%. For all cases, if the threshold had not been met, the relevant component multiplier would be 0%.

Performance Metric^*
Threshold Target Maximum Actual % of Target
Global Adjusted Net Income Performance⁽¹⁾
(3.5 )% 3.4 % 10.2 % (3.0 )% 62 %
U.S. Segment Adjusted EBITDA Performance (6.4 )% (3.0 )% 0.4 % (11.5 )% — %
U.S. NSV Performance (0.9 )% 0.2 % N/A
(0.6 )% 75 %
EMEA Segment Adjusted EBITDA Performance⁽²⁾
8.1 % 12.3 % 16.4 % 2.2 % 60 %
EMEA NSV Performance 1.1 % 3.3 % N/A
2.6 % 90 %

*Growth rates reflect budget foreign exchange rates and exclude the impacts of (i) our Venezuelan subsidiary, due to the highly inflationary environment, (ii) our 50.1% interest in our South African subsidiary, which was sold in May 2018, and (iii) with respect to NSV, fluctuations for dairy commodities that impact pricing terms under related contracts. Adjusted Net Income is defined as net income/(loss) excluding, when they occur, the impacts of integration and restructuring expenses, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, 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), and U.S. Tax Reform discrete income tax expense/(benefit), and including, when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis. Segment Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), net, provision for/(benefit from) income taxes, and depreciation and amortization (excluding integration and restructuring expenses); in addition to these adjustments, we exclude, when they occur, the impacts of integration and restructuring expenses, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, gains/(losses) on the sale of a business, other gains/(losses) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), and equity award compensation expense (excluding integration and restructuring expenses).

~~(1)~~

When the Committee certified the achievement of performance with respect to Adjusted Net Income performance, fiscal year 2018 consolidated financial statements were still being prepared. Given the immateriality of any anticipated adjustments, the Committee certified and approved performance at a maximum level of 64%, subject to downward adjustment in management’s discretion based on the preparation of the 2018 consolidated financial statements.


~~(2)~~	When the Committee certified performance with respect to EMEA Segment Adjusted EBITDA performance, the Committee certified and approved performance at an amount excluding the impact of the Middle East and Africa (“MEA”) due to one-off inventory amounts related to previous years when MEA was a part of a different operating segment than EMEA.

In 2018, all NEOs exceeded threshold on their Individual Rating and Financial Multiplier components of the PBP calculation. The Committee granted certain members of management discretion to increase or decrease the final PBP payouts of the other NEOs with up to a 20% variance compared to the amounts as calculated based on the Base Salaries, Target Awards, Individual Ratings, and Financial Multipliers described above. Had they not forfeited their rights to the payment, Mr. Hees would have earned a PBP payout of $1,060,000, Mr. Knopf would have earned a PBP payout of $500,000, and Mr. Basilio would have earned a PBP payout of $1,023,000. Mr. Oliveira received a PBP payout of $733,854, and Ms. La Lande received a PBP payout of $543,000. Mr. Hees would have received a decreased discretionary payout related to the longer-term business initiatives reflected in his MBOs. Messrs. Knopf and Basilio would have received, and Mr. Oliveira and Ms. La Lande did receive, an increased discretionary payout related to top line growth results and/or strong leadership of important initiatives in his or her respective area.

~~Individual Rating~~

The foundation of each participant’s Individual Rating is our MBO process. At the beginning of each year, the Committee establishes a series of performance goals, or MBOs, that are established based on the Company’s corporate strategy, and performance goals are then “cascaded” throughout the organization. First, the Committee establishes MBOs for Mr. Hees. Then, in consultation with the Committee, Mr. Hees establishes corresponding MBOs for each of his direct reports, including the other NEOs. His direct reports, in turn, establish MBOs for their direct reports. This cascading process allows the Company to drive initiatives that are aligned throughout the organization.

Each NEO has an MBO comprised of multiple goals or objectives. For each goal, there are one or more “Key Performance Indicators,” or KPIs. KPIs are the quantitative or qualitative metrics used to track achievement of the goals. We have set forth below a summary of the 2018 MBO goals for each of the NEOs and the overall performance ascribed by the Committee for each NEO based on his or her performance. None of the individual KPIs are material to understanding how the PBP operated in 2018.

Bernardo Hees: Mr. Hees had three MBO goals. These were: (i) “Deliver Kraft Heinz Financial Results”, which was evaluated based on Kraft Heinz’s financial performance in NSV and Adjusted Net Income, (ii) “Strengthen Innovation and Develop Digital Strategy/Go-to-Market”, which was evaluated based on the innovation pipeline for 2019 and 2020 and E-commerce and digital innovation, and (iii) “Deliver New Projects to Sustain the Business”, which was evaluated based on the supply chain planning system and business expansion. Based on Mr. Hees’s performance, he was given an overall performance score of 66%.

David Knopf: Mr. Knopf had three MBO goals. These were (i) “Deliver Kraft Heinz Financial Results”, which was evaluated based on Kraft Heinz’s financial performance in Adjusted Net Income and operating free cash flow, (ii) “Increase KHC Financial Efficiency”, which was evaluated based on tax performance compared to budget and project-specific goals, and (iii) “Deliver New Projects to Sustain the Business”, which was evaluated based on business expansion and project-specific goals. Based on Mr. Knopf's performance, he was given an overall performance score of 82%.

Paulo Basilio: Mr. Basilio had three MBO goals. These were (i) “Deliver Kraft Heinz Results”, which was evaluated based on case fill rates and U.S. financial performance in contribution margin and NSV, (ii) “Ensure Successful Marketing and Robust R&D Pipeline,” which was evaluated based on market share and the innovation pipeline for 2019 in the U.S. Zone, and (iii) “Deliver New Projects to Foster the Business”, which was evaluated based on initiatives relating to Kraft Heinz’s Springboard platform. Based on Mr. Basilio’s performance, he was given an overall performance score of 84%.

Rafael Oliveira: Mr. Oliveira had three MBO goals. These were (i) “Deliver Kraft Heinz EMEA Financial Results,” which was evaluated based on EMEA financial performance in contribution margin and NSV, (ii) “Ensure Successful Marketing and Robust R&D Pipeline,” which was evaluated based on market share and the innovation pipeline for 2019 in the EMEA Zone, and (iii) “Deliver New Projects to Foster the Business,” which was evaluated based on foodservice growth in EMEA and NSV growth in MEA. Based on Mr. Oliveira’s performance, he was given an overall performance score of 84%.

Rashida La Lande: Ms. La Lande had three MBO goals. These were (i) “Deliver Effective and Efficient Legal Services,” which was evaluated based on project-specific goals and legal victories, financial and EBITDA partnerships with the business, and legal victories from ongoing litigation, (ii) “Protect and Promote our Innovations and Brands,” which was evaluated based on Board projects and crisis management design and preparation for the U.S. and Canada, and (iii) “Ethics and Compliance” which was evaluated based on the Company’s ethics and compliance initiatives worldwide. Based on Ms. La Lande’s performance, she was given an overall performance score of 95%.

~~Annual Bonus Swap Program - Restricted Stock Units~~

As part of its commitment to fostering an ownership mentality, Kraft Heinz permits certain employees to participate in an annual bonus swap program (the “Bonus Swap Program”). Under the Bonus Swap Program, eligible employees can elect to invest a portion of their annual PBP payout in our common stock (we refer to these purchased shares as “Investment Shares”) and leverage that investment through the issuance of matching RSUs (we refer to these RSUs as “Matching RSUs”). The Matching RSUs cliff vest on the fifth anniversary of the date of grant subject to continued employment and the retention of the Investment Shares as described below. To participate in the Bonus Swap Program, eligible employees can elect to use 0%, 25% or 50% of their calculated net bonus (after deducting an amount based on a normalized tax rate depending on country of residence) to purchase Investment Shares. The number of Investment Shares purchased is calculated as the product of the calculated net bonus and the swap election percentage, divided by the closing price reported on the Nasdaq on the date of purchase:

The number of Matching RSUs a participant received in 2018 was based on (1) the participant’s gross bonus payout in 2018 relating to the 2017 fiscal year (before-tax) and (2) a discretionary multiplier associated with the participant’s level in the organization and his or her investment election percentage.

In 2018, only Mr. Oliveira participated in the Bonus Swap Program, as he was the only NEO to receive a PBP bonus payment related to 2017. The following table sets forth, for Mr. Oliveira, the portion of his fiscal 2017 bonus used to purchase Investment Shares (the “Conversion Amount”), the number of Investment Shares purchased, and the number of Matching RSUs granted to him (which Matching RSUs were granted in 2018):

Name
Conversion Amount
($)

Investment Shares
(#)

2017 Bonus Matching
RSUs granted in 2018
(#)
Mr. Oliveira 121,807 1,821 6,622

Under our Bonus Swap Program, so long as the Matching RSUs remain unvested, if an employee transfers any of the related Investment Shares, he or she immediately forfeits a proportional amount of the corresponding Matching RSUs. The Committee believes that the Bonus Swap Program as a whole and the forfeitability of the Matching RSUs in particular, strongly motivates eligible employees to hold Kraft Heinz common stock for the long-term, further emphasizing a long-term view in creating stockholder value. Prior to 2016, the Company issued matching stock options rather than Matching RSUs in the Bonus Swap Program.

~~Discretionary Equity Awards~~

From time to time, we may make discretionary equity awards to employees. Historically, these discretionary awards have been made in the form of stock options. These stock options are granted with an exercise price based on the fair market value of a Kraft Heinz share on the grant date and cliff vest after a five-year period. In 2018, the Committee approved discretionary option awards of 44,850 stock options to Mr. Knopf and 52,325 stock options to Ms. La Lande in order to continue to align a portion of their long-term incentive compensation directly with stockholders’ interests. The options have an exercise price of $66.89 and will cliff vest on March 1, 2023, subject to continued employment through that date.

In March 2018, the Company issued additional PSUs to a limited number of employees deemed key to achievement of our long-term goals, including all of our NEOs, in order to place a significant portion of their compensation at risk if performance goals are not achieved. These PSUs could be earned over a three-year performance period based on Kraft Heinz’s achievement of financial performance metrics based on Adjusted EBITDA for the period beginning in January 2018 and ending at the end of December 2020. Once earned, to promote retention of key talent, the PSUs will remain subject to a continued service requirement through March 1, 2023. As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero.

In March 2018, in order to further retain and motivate top talent and align the interests of management with those of the Company’s stockholders, the Company also issued RSUs, separately from the Bonus Swap Program, to a limited number of employees deemed key to achievement of our long-term goals, including all of our NEOs. These RSUs will cliff vest on March 1, 2023, subject to continued employment.

~~Additional information about the stock option, PSU, and RSU awards is provided in the 2018 Grants of Plan Based Awards Table and the 2018 Outstanding Equity Awards at Fiscal Year-End Table below.~~

~~Benefits and Perquisites~~

In addition to base salary, our PBP, and long-term equity grants, we provided and continue to provide certain executive benefit programs to our NEOs. Kraft Heinz maintains defined contribution retirement plans to allow employees to save for retirement in a tax-efficient manner. These plans are broadly available to eligible employees and do not discriminate in favor of the NEOs or other members of senior management. None of the NEOs participate in any defined benefit pension plans, non-qualified deferred compensation plans, or supplemental retirement or executive savings plans.

Kraft Heinz also provides health and welfare insurance benefits to employees, including the NEOs. These benefits include life, disability, and health insurance benefit plans that are broadly available to eligible employees and do not discriminate in favor of the NEOs or other members of senior management.

From time to time, Kraft Heinz provides limited perquisite benefits. For example, we provide limited tax advisory services, immigration benefits, and reimbursement of certain relocation expenses for business reasons. Kraft Heinz provides other limited perquisite benefits, which are detailed in the 2018 Summary Compensation Table.

~~Minimum Stock Ownership Guidelines~~

Our compensation programs promote a strong alignment of the interests of our executives with those of our stockholders. For example, in order to participate in our Bonus Swap Program, each participant must use a significant portion of his or her bonus to purchase our common stock. In 2016, we adopted minimum stock ownership guidelines, which require our NEOs to attain levels of beneficial stock ownership measured based on a multiple of his or her annual base salary, as set forth below:



~~Role~~		~~Minimum Ownership~~
~~CEO~~		~~5x Base Salary~~
~~Other Named Executive Officers~~		~~3x Base Salary~~

The stock ownership guidelines require NEOs to attain levels of beneficial stock ownership within five years from the later of December 8, 2016 and the date of the NEO’s appointment to a position subject to the guidelines. For more details on the stock ownership of our NEOs, please refer to “Ownership of Equity Securities.”

~~Clawback, Anti-Hedging and Anti-Pledging Policies~~

Our stock option, PSU, and RSU award agreements provide that, in certain circumstances, the award and any proceeds or other benefits a participant may receive may be subject to forfeiture and/or repayment to Kraft Heinz to the extent required to comply with any requirements imposed under applicable laws and/or the rules. Further, if a participant receives any amount in excess of what he or she should have received under the terms of the award for any reason (including without limitation by reason of a financial restatement, mistake in calculations, or administrative error), all as determined by the Committee, then he or she will be required to promptly repay any such excess amount to Kraft Heinz. Our insider trading policy also limits the timing and types of transactions in Kraft Heinz securities by executive officers, including our NEOs. Among other restrictions, the policy prohibits holding Kraft Heinz securities in a margin account or pledging Kraft Heinz securities as collateral for a loan without advance written notice to the Corporate Secretary. In addition, the policy prohibits short-selling Kraft Heinz securities, transacting in puts, calls, or other derivatives on Kraft Heinz securities, or hedging transactions on Kraft Heinz securities without prior approval from the Corporate Secretary.

~~Impact of Tax and Accounting Policies~~

When determining total direct compensation packages, the Committee considers all factors that may have an impact on our financial performance, including tax and accounting rules and regulations under Section 162(m) of the Code. Section 162(m) of the Code generally limits our ability to deduct compensation paid to “covered employees” (as defined in the Code) to the extent such compensation exceeds $1 million to such employee in any fiscal year. For taxable years beginning prior to January 1, 2018, there was a performance-based exception to this rule that permitted us to deduct compensation that met certain qualifying performance-based criteria. This performance-based exception no longer applies for taxable years beginning after December 31, 2017, such that compensation paid to our “covered employees” in excess of $1 million will not be deductible unless it qualifies for limited transition relief applicable to certain arrangements in place as of November 2, 2017.

Despite the Committee’s intentions to structure the Company’s incentive programs for taxable years commencing prior to January 1, 2018 in a manner intended to be exempt from the deduction limitations of Section 162(m), there can be no assurance that we will be able to take advantage of the limited transition relief and satisfy the requirements for such exemption. Further, the Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.

~~EXECUTIVE COMPENSATION TABLES~~

~~Summary Compensation Table~~

Name and
Principal Position
Year
Salary
($)

Bonus
($)

Stock Awards⁽²⁾⁽³⁾
($)

Option Awards⁽⁴⁾
($)

Non-Equity Incentive Plan Compensation⁽⁵⁾
($)

Change in Pension Value and Non-qualified Deferred Compensation Earnings
($)

All Other Compensation⁽⁶⁾
($)

Total Compensation
($)

Total Compensation as Adjusted from SEC Rules⁽⁷⁾
($)
Bernardo Hees,
Chief Executive Officer⁽¹⁾
2018 1,000,000
—
25,483,713
—
1,060,000
—
149,136
27,692,849
1,149,136
2017 1,000,000
—
2,730,557
—
—
—
463,622
4,194,179
4,194,196
2016 1,000,000
—
1,449,990
—
2,730,574
—
92,027
5,272,591
2,542,027

David Knopf,
EVP and Chief Financial Officer
2018 500,000
—
5,946,213
497,835
500,000
—
28,177
7,472,225
528,176
2017 288,461
—
2,833,532
327,515
—
—
27,714
3,477,222
562,066

Paulo Basilio,
Zone President of U.S.
2018 750,000
—
16,989,123
—
1,023,000
—
83,699
18,845,822
833,699
2017 623,077
—
1,499,909
—
—
79,840
2,202,826
2,202,917
2016 600,000
—
599,924
—
1,500,000
—
48,656
2,748,580
1,248,656

Rafael Oliveira,
Zone President of EMEA⁽⁸⁾
2018 560,101
—
8,937,536
733,854
—
101,918
10,333,408
1,074,047
2017 450,657
—
303,273
409,397
412,029
—
166,835
1,742,191
919,726

Rashida La Lande, SVP, Global General Counsel & Head of CSR and Government Affairs; Corporate Secretary 2018 612,500
1,000,000
2,973,163
580,808
543,000
—
86,910
5,796,381
1,699,410


~~(1)~~	On April 22, 2019, we announced that Mr. Hees would leave Kraft Heinz in 2019. Mr. Hees forfeited the PSU and RSU awards granted in 2018 (aggregate grant date fair value of $25,483,713) due to the performance of the business and his decision to leave the company, respectively. Therefore, the Total Compensation as Adjusted from SEC Rules paid to Mr. Hees in 2018 was $1,149,136.

~~(2)~~

The amounts shown in this column include the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of (i) Matching RSUs, (ii) PSUs, and (iii) RSUs granted to the NEOs. As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero. For a discussion of the assumptions made in the valuation of the awards in this column, see Note 12, ~~Employees’ Stock Incentive Plans, in Item 8,~~ ~~Financial Statements and Supplementary Data~~. Under our Bonus Swap Program, the Matching RSUs for the NEOs were calculated as the product of the calculated gross bonus and the swap election percentage, divided by the closing price reported on the Nasdaq on the date of purchase. For a discussion of the terms applicable to the Matching RSUs, PSUs, and RSUs as well as vesting, forfeiture, and other terms, see “Elements of Compensation Program” in the CD&A.

~~(3)~~

As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero. For Mr. Hees, the grant date fair value of the PSU award on March 1, 2018 was $17,838,582. For Mr. Knopf, the grant date fair value of the PSU award on March 1, 2018 was $4,162,349. For Mr. Basilio, the grant date fair value of the PSU award on March 1, 2018 was $11,892,369. For Mr. Oliveira, the grant date fair value of the PSU award on March 1, 2018 was $5,946,213. For Ms. La Lande, the grant date fair value of the PSU award on March 1, 2018 was $1,486,582. The grant date fair value for the PSU award granted on March 1, 2018 was $56.82.

For Mr. Hees, the grant date value of the RSU award on March 1, 2018 was $7,645,131. On April 22, 2019, we announced that Mr. Hees would leave Kraft Heinz in 2019. As a result of his departure, Mr. Hees will forfeit the RSU award granted in 2018. For Mr. Knopf, the grant date value of the RSU award on March 1, 2018 was $1,783,864. For Mr. Basilio, the grant date value of the RSU award on March 1, 2018 was $5,096,754. For Mr. Oliveira, the grant date value of the RSU award on March 1, 2018 was $2,548,377. For Ms. La Lande, the grant date value of the RSU award on March 1, 2018 was $1,486,582. The grant date fair value for the RSU awards was $66.89 for award granted on March 1, 2018 under the bonus swap program and was $56.82 for non-dividend eligible award granted on March 1, 2018.

~~(4)~~

Amounts shown in this column represent the aggregate grant date fair value of discretionary option awards granted to the NEOs. The values of the stock option awards are equal to their grant date fair value as computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of the stock option awards in this column, see Note 12, ~~Employees’ Stock Incentive Plans, in Item 8,~~ ~~Financial Statements and Supplementary Data~~.

~~(5)~~

Amounts reported in this column reflect compensation earned for 2018 performance under our PBP. As discussed in the CD&A and consistent with our pay for performance philosophy, due to the difficult operating environment in 2018 and the Company’s financial performance, Messrs. Hees, Knopf, and Basilio asked to forfeit their rights to the amounts payable pursuant to the PBP with respect to fiscal year 2018 and the Committee approved their forfeitures. The bonuses were paid in cash to each other NEO after the end of 2018.

~~(6)~~

For Mr. Hees, represents dividend equivalents that accrued on Matching RSUs ($128,176), a matching contribution to the Kraft Heinz 401(k), and basic life insurance coverage. For Mr. Knopf, represents a matching contribution to the Kraft Heinz 401(k), dividend equivalents that accrued on Matching RSUs, and basic life insurance coverage. For Mr. Basilio, represents dividend equivalents that accrued on Matching RSUs ($63,609), a matching contribution to the Kraft Heinz 401(k), and basic life insurance coverage. For Mr. Oliveira, represents dividend equivalents that accrued on Matching RSUs ($42,298), tax support, and a matching contribution to the UK contribution scheme. For Ms. La Lande, represents payment for relocation expenses ($66,664), a matching contribution to the Kraft Heinz 401(k), and basic life insurance coverage.

~~(7)~~

To supplement the SEC-required disclosure in the other columns of the 2018 Summary Compensation Table, we have included this additional column, which shows “Total Compensation as Adjusted from SEC Rules” representing the portion of the “Total Compensation” available to each NEO in each of the years shown. We are presenting this supplemental column to show how the Committee views the NEOs’ compensation for each of the years shown. The “Total Compensation” column as calculated under SEC rules includes several items that are not necessarily reflective of compensation available to the NEOs in a particular year. Amounts reported in the “Total Compensation as Adjusted from SEC Rules” column differ substantially from the amounts determined under SEC rules as reported in the “Total Compensation” column. “Total Compensation as Adjusted from SEC Rules” is not a substitute for “Total Compensation.” “Total Compensation as Adjusted from SEC Rules” represents: (1) “Total Compensation,” as calculated under applicable SEC rules, minus (2) the aggregate grant date fair value of equity awards (as reflected in the “Stock Awards” and “Option Awards” columns), and plus (3) the value realized from any exercise of stock options and the vesting of RSUs or PSUs before payment of any applicable withholding taxes and brokerage commissions (as reflected in the Option Exercises and Stock Vested tables of the proxy statements for the respective years), including the value realized from the payment of any dividend equivalents. In addition, “Total Compensation as Adjusted from SEC Rules” reflects any bonus paid in each of the years shown, whereas the “Total Compensation” column calculated pursuant to the SEC rules reflects any bonus earned for the applicable years (regardless of when paid and not taking into account any subsequent forfeitures thereof).


~~(8)~~	Foreign currency conversion based on daily average for calendar year 2018. Mr. Oliveira’s base salary is paid in British pounds. The amounts shown in the table above are based on the following 12-month average exchange rate: British pounds (.7499 USD/GBP).

~~Grants of Plan-Based Awards Table~~

The following table sets forth information regarding the grant of plan-based awards for each of the NEOs in 2018. As described in the CD&A, due to the difficult operating environment in 2018 and the Company’s financial performance, Messrs. Hees, Knopf, and Basilio have forfeited their rights to the amounts payable pursuant to the PBP with respect to fiscal year 2018.

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards⁽⁴⁾

All Other Stock Awards: Number of Shares of Stock or Units
(#)

All Other Option Awards: Number of Securities Under lying Options
(#)

Exercise Price of Option Awards
($/Share)

Grant Date Fair Value of Stock and Option Awards
($)
Name
Grant Date⁽³⁾

Grant
Type

Threshold
($)

Target
($)

Maximum
($)

Threshold
(#)

Target
(#)

Maximum
(#)

Mr. Hees
PBP⁽¹⁾
900,000
2,700,000
3,000,000

3/1/18
RSUs⁽²⁾
134,550
7,645,131
3/1/18
PSUs⁽⁵⁾
251,159
313,949
376,739
17,838,582

Mr. Knopf
PBP⁽¹⁾
262,500
787,500
875,000

3/1/18 RSUs 31,395
1,783,864
3/1/18
PSUs⁽⁵⁾
58,604
73,255
87,906
4,162,349
3/1/18 Options 44,850
66.89
497,835
Mr. Basilio
PBP⁽³⁾
562,500
1,687,500
1,875,000

3/1/18 RSUs 89,700
5,096,754
3/1/18
PSUs⁽⁵⁾
167,439
209,299
251,159
11,892,369
Mr. Oliveira
PBP⁽⁴⁾
319,783
950,772
1,031,636

3/1/18
Matching
RSUs
6,622
442,946
3/1/18 RSUs 44,850
2,548,377
3/1/18
PSUs⁽⁵⁾
83,720
104,650
125,580
5,946,213
Ms. La Lande
PBP⁽¹⁾
275,625
826,875
918,750

3/1/18 RSUs 26,163
1,486,582
3/1/18
PSUs⁽⁵⁾
20,930
26,163
31,396
1,486,582
3/1/18 Options 52,325
66.89
580,808

~~(1)~~

For Messrs. Hees and Knopf and Ms. La Lande, the PBP is based on global change in Adjusted Net Income and has a Threshold assumption of 60% and Maximum assumption of 100%. Threshold amounts also assume a minimum individual MBO Score of 50%, while Target and Maximum amounts assume an individual MBO Score of 100%. The actual payment would be based on achievement of individual and financial performance goals. Annual incentive award payments, to the extent not forfeited, were made in cash to each NEO after the end of 2018 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.


~~(2)~~	~~On April 22, 2019, we announced that Mr. Hees would leave Kraft Heinz in 2019. As a result of his departure, Mr. Hees will forfeit the RSU award granted in 2018.~~

~~(3)~~

For Mr. Basilio, the US Zone PBP is based 75% on change in U.S. NSV and 25% on change in U.S. Segment Adjusted EBITDA and has a Threshold assumption of 60%, and Maximum assumption of 90% for NSV change and 130% for Segment Adjusted EBITDA change. Threshold amounts also assume an individual MBO Score of 50%, while Target and Maximum amounts assume an individual MBO Score of 100%. Mr. Basilio’s actual payment is based on achievement of individual goals and would receive a weighting on financial performance split by 70% of the US Zone metrics plus 30% of the global metrics. Annual incentive award payments, to the extent not forfeited, were made in cash to each NEO after the end of 2018 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.

~~(4)~~

For Mr. Oliveira, the EMEA Zone PBP is based 75% on change in EMEA NSV and 25% on change in EMEA Segment Adjusted EBITDA and has a Threshold assumption of 70% for NSV change and 60% for Segment Adjusted EBITDA change, and Maximum assumption of 100% for NSV change and 130% for Segment Adjusted EBITDA change. Threshold amounts also assume an individual MBO Score of 50%, while Target and Maximum amounts assume an individual MBO Score of 100%. Mr. Oliveira’s actual payment is based on achievement of individual goals and will receive a weighting on financial performance split by 70% of the EMEA Zone metrics plus 30% of the global metrics. Annual incentive award payments, to the extent not forfeited, were made in cash to each NEO after the end of 2018 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.

~~(5)~~

The PSUs granted on March 1, 2018 were granted under the 2016 Omnibus Incentive Plan. The target number of shares shown in the table reflects the number of shares of common stock that will be earned if each of the performance metrics are achieved at target levels by the end of 2020. If 80% of the performance metrics are not achieved by the end of 2020, the target and threshold opportunities roll over to 2021 with a 20 percentage point payout penalty. Actual shares awarded will vest on March 1, 2023 provided the awardee also meets certain requirements. Dividends are not earned on the PSUs. As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero.

~~Outstanding Equity Awards at Fiscal Year-End Table~~

~~The following table sets forth each NEO’s outstanding equity awards, as of the end of 2018.~~

Option Awards Stock Awards
Name Grant Date Grant Type
Number
of Securities
Underlying
Unexercised
Options
Exercisable
(#)

Number
of Securities
Underlying
Unexercised
Options
Unexercisable
(#)

Option
Exercise
Price
($)

Option
Expiration
Date

Number of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)

Market
Value
of
Shares
or
Units of
Stock
That
Have
Not
Vested⁽²⁾
($)

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)

Equity Incentive
Plan Awards:
Market or
Payout
Value of Unearned Shares,
Units or Other
Rights That Have Not Vested⁽²⁾
($)

Mr. Hees 3/1/18 RSUs 134,550
⁽¹²⁾
5,862,344
⁽¹⁴⁾

3/1/18 PSUs 251,159
⁽¹³⁾
10,943,006
⁽¹³⁾
3/1/17 RSU-match 32,118
⁽¹⁾
1,399,381
3/1/16 RSU-match 20,638
⁽¹⁾
899,198
8/20/15 Stock Options 202,021
⁽³⁾
74.25 8/20/25
2/12/15 Option-match 71,819
⁽⁴⁾
30.46 2/12/25
2/14/14 Option-match

98,951
⁽⁵⁾
22.56 2/14/24
7/1/13 Stock Options 1,329,996
⁽⁶⁾
22.56 7/1/23
Mr. Knopf 3/1/18 RSUs 31,395
⁽¹²⁾
1,367,880
3/1/18 PSUs 58,604
⁽¹³⁾
2,553,376
3/1/18 Stock Options 44,850
⁽¹¹⁾
66.89 3/1/28
3/1/17 RSU-match 2,530
⁽¹⁾
110,232
3/1/17 Stock Options 21,875
⁽⁷⁾
91.43 3/1/27
3/1/17 PSUs 19,687
⁽⁸⁾
857,771
3/1/16 RSU-match 967
⁽¹⁾
42,132
8/20/15 Stock Options 67,341
⁽³⁾
74.25 8/20/25
Mr. Basilio 3/1/18 RSUs 89,700
⁽¹²⁾
3,908,229
3/1/18 PSUs 167,439
⁽¹³⁾
7,295,326
3/1/17 RSU-match 17,643
⁽¹⁾
768,706
3/1/16 RSU-match 8,539
⁽¹⁾
372,044
8/20/15 Stock Options 134,681
⁽³⁾
74.25 8/20/25
2/12/15 Option-match 41,377
⁽⁴⁾
30.46 2/12/25
2/14/14 Option-match

38,257
⁽⁵⁾
22.56 2/14/24
7/1/13 Stock Options 531,998
⁽⁶⁾
22.56 7/1/23

Mr. Oliveira 3/1/18 RSUs 44,850
⁽¹²⁾
1,954,115
3/1/18 PSUs 83,720
⁽¹³⁾
3,647,680
3/1/18 RSU-match 6,920
⁽¹⁾
301,504
3/1/17 RSU-match 3,567
⁽¹⁾
155,414
3/1/17 Stock Options 27,344
⁽⁷⁾
91.43 3/1/27
3/1/16 RSU-match 6,923
⁽¹⁾
301,635
3/1/16 Stock Options 32,192
⁽⁹⁾
77.66 3/1/26
2/12/15 Option-match 4,492
⁽⁴⁾
30.46 2/12/25
2/12/15 Stock Options 16,419
⁽⁴⁾
30.46 2/12/25
5/21/14 Stock Options 110,833
⁽¹⁰⁾
22.56 5/21/24
Ms. La Lande 3/1/18 RSUs 26,163
⁽¹²⁾
1,139,922
3/1/18 PSUs 20,930
⁽¹³⁾
911,938
3/1/18 Stock Options 52,325
⁽¹¹⁾
66.89 3/1/28


~~(1)~~	For all Matching RSUs, this total includes dividends that are reinvested at the dividend payment date in additional RSUs that are subject to the same restrictions as the original grant. The Matching RSUs granted on March 1, 2016, March 1, 2017, and March 1, 2018 are scheduled to vest on the fifth anniversary of the grant date.


~~(2)~~	The market value of the shares that have not vested is based on the closing price of $43.57 for Kraft Heinz common stock on December 28, 2018, the last trading day of our fiscal year, as reported on Nasdaq.


~~(3)~~	~~100% of these awards are scheduled to vest on August 20, 2020.~~


~~(4)~~	~~100% of these awards are scheduled to vest on February 12, 2020. Options and exercise price reflect the conversion in connection with the 2015 Merger.~~


~~(5)~~	~~100% of these awards vested on February 14, 2019, and they are scheduled to expire on February 14, 2024. Options and exercise price reflect the conversion in connection with the 2015 Merger.~~


~~(6)~~	~~100% of these awards vested on July 1, 2018, and they are scheduled to expire on July 1, 2023. Options and exercise price reflect the conversion in connection with the 2015 Merger.~~


~~(7)~~	~~100% of the award is scheduled to vest on March 1, 2022.~~

~~(8)~~

As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero. The shares reported in this row represent potentially issuable shares under the PSU award granted on March 1, 2017, which cliff vest on March 1, 2022. The PSUs represent the right to receive a variable number of Kraft Heinz shares based on Kraft Heinz’s actual performance during a define performance period. If 80% of the performance target is achieved in 2019, the participant will receive 70% of the underlying shares. If 80% of the performance target is achieved in 2020, participant will receive 65% of the underlying shares and if 80% of the performance target is achieved in 2021, the participant will receive 60% of the underlying shares. The number of shares reported in this row is based on threshold performance. Dividend equivalents do not accrue on the PSUs. If the participant is terminated prior to March 1, 2020, he or she will forfeit the entire award. The PSUs will vest as earned on March 1, 2022.


~~(9)~~	~~100% of the award is scheduled to vest on March 1, 2021.~~


~~(10)~~	~~100% of the award is scheduled to vest on May 21, 2019. Options and exercise price reflect the conversion in connection with the 2015 Merger.~~


~~(11)~~	~~100% of these awards are scheduled to vest on March 1, 2023.~~


~~(12)~~	~~100% of these awards are scheduled to vest on March 1, 2023, and the RSU awards are not dividend eligible.~~

~~(13)~~

As of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero. The shares reported in these rows represent potentially issuable shares under the PSU award granted on March 1, 2018, which cliff vest on March 1, 2023. The PSUs represent the right, to the extent not forfeited, to receive a variable number of Kraft Heinz shares based on Kraft Heinz’s actual performance during a defined performance period. If the threshold of the performance target is achieved by the end of 2020, the participant will receive 80% of the underlying shares. If the threshold for the performance target is not achieved by the end of 2020, the target and threshold opportunities roll over to 2021 with a 20 percentage point payout penalty. The number of shares reported in these rows is based on threshold performance. Dividend equivalents do not accrue on the PSUs. If the participant is terminated prior to March 1, 2021, he or she will forfeit the entire award. The PSUs will vest as earned on March 1, 2023 provided the awardee also meets certain requirements.


~~(14)~~	~~On April 22, 2019, we announced that Mr. Hees would leave Kraft Heinz in 2019. As a result of his departure, Mr. Hees will forfeit the RSU award granted in 2018.~~

~~Option Exercises and Stock Vested Table~~

~~There were no stock options exercised nor did any RSUs vest for any NEO in 2018.~~



	~~Option Awards~~		~~Stock Awards~~
	~~Number of Shares Acquired on Exercise~~	~~Value Realized on Exercise~~	~~Number of Shares Acquired on Vesting~~	~~Value Realized on Vesting~~
~~Name~~	~~(#)~~	~~($)~~	~~(#)~~	~~($)~~
~~Mr. Hees~~	—	—	—	—
~~Mr. Knopf~~	—	—	—	—
~~Mr. Basilio~~	—	—	—	—
~~Mr. Oliveira~~	—	—	—	—
~~Ms. La Lande~~	—	—	—	—

~~Pension Benefits Table~~

~~None of our NEOs participate in any defined benefit pension arrangements.~~

~~Nonqualified Deferred Compensation Table~~

~~None of our NEOs participate in any nonqualified deferred compensation arrangements.~~

~~Potential Payments Upon Termination or Change in Control Table~~

~~The table, footnotes, and narratives below reflect the assumption that a hypothetical termination of employment or change in control occurred on the last day of 2018.~~

Name Element
Involuntary Termination Without
Cause⁽¹⁾or Termination Upon Change in Control
($)

Other Types of
Separations⁽²⁾
($)
Mr. Hees⁽³⁾

Salary 1,000,000
—

Bonus⁽⁵⁾
—
1,060,000

Intrinsic Value of Accelerated Equity⁽³⁾
2,587,776
2,587,776

Health & Welfare Benefits⁽⁴⁾
14,586
—
Outplacement 3,200
—
Total 3,605,562
3,647,776
Mr. Knopf
Salary 500,000
—
Bonus —
500,000

Intrinsic Value of Accelerated Equity⁽³⁾
16,853
16,853

Health & Welfare Benefits⁽⁴⁾
14,258
—
Outplacement 3,200
—
Total 534,311
516,853
Mr. Basilio
Salary 750,000
—
Bonus —
1,023,000

Intrinsic Value of Accelerated Equity⁽³⁾
1,117,313
1,117,313

Health & Welfare Benefits⁽⁴⁾
14,586
—
Outplacement 3,200
—
Total 1,885,099
2,140,313
Mr. Oliveira
Salary 560,101
—
Bonus —
733,854

Intrinsic Value of Accelerated Equity⁽³⁾
2,148,021
2,148,021

Health & Welfare Benefits⁽⁴⁾
2,556
—
Outplacement 3,193
—
Total 2,713,871
2,881,875
Ms. La Lande
Salary 650,000
—
Bonus —
543,000

Intrinsic Value of Accelerated Equity⁽³⁾
—
—

Health & Welfare Benefits⁽⁴⁾
14,586
—
Outplacement 3,200
—
Total 667,786
543,000

~~(1)~~

No enhanced severance is provided on a termination in connection with a change in control. Kraft Heinz does not have a specified Change in Control Plan for executives, and treatment is determined by the plan agreements and local regulations applicable to each employee. Our Severance Pay Plan generally provides for 12 months of base salary with a signed release of claims. The Severance Pay Plan would also include Company-paid COBRA for U.S.-based employees for the severance period and outplacement services.


~~(2)~~	~~Relates to termination due to death, disability, or normal retirement.~~

~~(3)~~

As of the last day of 2018, in the event of a termination without cause or due to retirement, death, or disability, stock options vest as if 20% of the options vested on each annual anniversary date of the specific grant. Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $43.57, the closing price of Kraft Heinz common stock on December 28, 2018 (the last trading day of our fiscal year, as reported on Nasdaq), and the exercise price of the options. Amounts also include the vesting of Matching RSUs granted in 2016 at a pro rata rate of 20% of the RSUs as if they vested on each annual anniversary date of the grant. The 2017 Matching RSUs and 2018 RSUs and Matching RSUs are not presented in this table because no pro rata vesting would occur if such event occurs prior to the second anniversary of the grant.

~~(4)~~

Amount reflects 12 months of medical and dental benefit coverage continuation under COBRA, less the executive premium contribution. As noted in the CD&A, due to the difficult operating environment in 2018 and the Company’s financial performance, Messrs. Hees, Knopf, and Basilio asked to forfeit their rights to the amounts payable pursuant to the PBP with respect to fiscal year 2018 and the Committee approved their forfeitures.


~~(5)~~	The Committee and Board approved a bonus to Mr. Hees in connection with his separation from the Company, $1,084,000, which represents his pro rata portion of his 2019 bonus based on an 85% performance rating and 85% Individual Rating.

~~Severance Pay Plan~~

Generally, Kraft Heinz provides for severance benefits to U.S.-based salaried employees, including our U.S.-based NEOs, pursuant to the terms of the U.S. Severance Pay Plan. The severance benefits for non-U.S.-based salaried employees are made pursuant to the local laws and regulations governing the jurisdiction in which they work, subject to adjustment at the discretion of Kraft Heinz for employees at certain organizational levels (such benefits, together with the U.S. Severance Pay Plan, are referred to as the “Severance Pay Plan”).

NEOs are eligible for severance benefits under the Severance Pay Plan upon an involuntary termination of employment, such as job elimination, location closing, or reduction in the workforce. NEOs must be willing to provide satisfactory transitional assistance in order to be eligible for severance benefits.

Pursuant to the U.S. Severance Pay Plan, Messrs. Hees, Basilio, and Knopf and Ms. La Lande would generally be eligible to receive a severance payment equal to 12 months of base salary upon the execution of a release of claims against Kraft Heinz. In addition, the Committee may, in its sole discretion, authorize payment of additional severance in respect of a participant’s annual bonus opportunity. Although Mr. Oliveira is not based in the U.S. and not otherwise covered by the U.S. Severance Pay Plan, the Company has determined that he is eligible to receive the same benefits as the other NEOs. Severance payments are generally made in a cash lump-sum, but may occasionally be made in periodic payments at Kraft Heinz’s discretion as soon as administratively feasible after the termination of employment and after the former NEO’s executed release has become irrevocable.

On April 22, 2019, Kraft Heinz announced that Mr. Hees would leave Kraft Heinz in 2019. On June 5, 2019, the Committee approved the following severance terms for Mr. Hees, which will become payable following Mr. Hees’s termination of employment and subject to his execution of a release of claims against Kraft Heinz: (1) a severance payment equal to 12 months of base salary, and (2) a pro-rata payment of his annual bonus under the PBP assuming performance at 85%, both with respect to the metrics related to Kraft Heinz’s financial performance (i.e., the “Financial Multiplier”) and Mr. Hees’s MBOs (i.e., the “Individual Rating”). Mr. Hees’ outstanding equity awards will be treated in accordance with the terms set forth in the governing agreements as described below.

No enhanced severance is provided on a termination in connection with a change in control of Kraft Heinz, and Kraft Heinz does not maintain any individual change in control severance or other similar agreements with any of the NEOs. None of the NEOs are entitled to receive a gross-up for golden parachute taxes that may become payable pursuant to Section 280G of the Code in connection with a change in control of Kraft Heinz.

~~Equity Awards~~

Generally, as of the last day of 2018, in the event of involuntary termination without cause, retirement, death, and disability, the stock options granted to the NEOs would vest as if 20% of the shares vested on each annual anniversary date of the specific grant, and for all other terminations and for voluntary resignations, the unvested stock options would be forfeited. In addition, as of the last day of 2018, beginning on the termination date, the exercise period was 90 days for termination without cause and one year for retirement, death, and disability. In April 2019, the Committee modified award agreements for outstanding equity awards (options, PSUs, Matching RSUs, and RSUs) with respect to the treatment upon a termination due to death, disability, or retirement. Such terminations, for option awards on or after the first anniversary of the specific grant date, and for RSU and Matching RSU awards on or after the anniversary deadlines outlined in the award agreements, would result in such awards being fully vested and exercisable, in the case of PSUs, to the extent the performance conditions had been satisfied. In addition, the Committee modified award agreements for outstanding options such that the exercise period for a termination without cause would be one year.

~~PAY RATIO DISCLOSURE~~

In accordance with Item 402(u) of Regulation S-K, promulgated by the Dodd-Frank Wall Street Reform Act and Consumer Protection Act of 2010, we determined the ratio of the annual total compensation of Mr. Hees relative to the annual total compensation of our median employee.

For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee, both the CEO and median employee’s annual total compensation were calculated consistent with the disclosure requirements of executive compensation under the Summary Compensation Table.

Pursuant to Item 402(u) of Regulation S-K and the instructions thereto, because there has been no significant change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure, we are utilizing the same median-compensated employee in our pay ratio calculation as was used in 2017. Our median-compensated employee is a full-time hourly non-U.S. factory employee.

To identify our median employee last year, we determined the annual total compensation by examining the 2017 annualized base salaries plus target incentive bonus for all individuals, excluding our Chief Executive Officer, who were employed by us as of December 1, 2017. In accordance with Item 402(u) and instructions thereto, we included all full-time, part-time, temporary, and seasonal employees worldwide. We believe the use of base salaries plus target incentive bonus for all employees is a consistently applied compensation measure, because we do not widely distribute annual equity awards to employees and because we believe that this measure reasonably reflects the total annual compensation of our employees.

After applying the methodology described above, our median employee compensation using the Summary Compensation Table requirements was $47,612. Our CEO’s compensation in the Summary Compensation Table was $29,047,768. Therefore, our CEO to median employee pay ratio (“CEO pay ratio”), a reasonable estimate calculated in a manner consistent with Item 402(u), is 610:1. The CEO’s total compensation of $29,047,768 included $1,060,000 payable pursuant to the PBP for 2018, as well as $17,838,582 related to the grant date fair value of PSUs. As noted above, Mr. Hees has decided to forfeit the PBP for 2018, and as of December 29, 2018, the expected payout of those PSUs was determined to be zero based on the probability of future achievement of performance metrics. If we had excluded the PBP payout for 2018 and the March 2018 PSUs from total CEO compensation, the CEO pay ratio would have been 213:1.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

~~SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS~~

The number of shares to be issued upon exercise or vesting of awards issued under, and the number of shares remaining available for future issuance under our equity compensation plans at December ~~29, 2018~~25, 2021 were:


	Number of securities to be issued upon exercise of outstanding options, warrants and rights(1)	Weighted average exercise price per share of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)	(b)		(c)
Equity compensation plans approved by security holders	29,577,435	$	45.43	25,590,076
Equity compensation plans not approved by security holders	—	—		—
Total	29,577,435			25,590,076

Number of securities to be issued upon exercise of outstanding options, warrants and rights⁽¹⁾
Weighted average exercise price per share of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category (a) (b) (c)
Equity compensation plans approved by security holders 23,858,121
$ 44.64
43,920,379
Equity compensation plans not approved by security holders —
—
—
Total 23,858,121
43,920,379


~~(1)~~	~~Includes the vesting of RSUs.~~

(1) Includes the vesting of RSUs and PSUs.

~~OWNERSHIP OF EQUITY SECURITIES~~

The following table shows the number of shares of our common stock beneficially owned as of June 5, 2019, unless otherwise noted, by each current director, director nominee, and Named Executive Officer, as well as the number of shares beneficially owned by all of our current directors and executive officers as a group. None of our common stock owned by these individuals is subject to any pledge. Unless otherwise indicated, each of the named individuals has, to Kraft Heinz’s knowledge, sole voting and investment power with respectInformation related to the ~~shares shown.~~

Name of Beneficial Owner
Beneficially
Owned Shares^{(1) (2)}

Deferred
Stock⁽³⁾
Total
Directors and Director Nominees:
Gregory E. Abel 22,166
20,878
43,044
Alexandre Behring 44,333
30,479
74,812
John T. Cahill⁽⁴⁾
781,338
8,799
790,137
Joao M. Castro-Neves —
—
—
Tracy Britt Cool 22,166
22,261
44,427
Feroz Dewan —
6,902
6,902
Jeanne P. Jackson 4,280
17,049
21,329
Jorge Paulo Lemann 22,166
20,878
43,044
John C. Pope 10,098
18,409
28,507
Marcel Hermann Telles 22,166
18,494
40,660
Alexandre Van Damme 6,000
2,269
8,269
George Zoghbi 240,161
—
240,161
Named Executive Officers: —
Bernardo Hees 1,486,199
—
1,486,199
David Knopf 1,106
—
1,106
Paulo Basilio 597,401
—
597,401
Rafael Oliveira 117,330
—
117,330
Rashida La Lande —
—
—
All directors and executive officers as a group (19 persons)⁽⁵⁾
3,406,501
166,418
3,572,919


~~(1)~~	~~Individual directors and executive officers as well as all directors and executive officers as a group beneficially own less than 1% of our issued and outstanding common stock as of June 5, 2019.~~


~~(2)~~	Includes the number of Kraft Heinz stock options that are exercisable, or will become exercisable, within 60 days after June 5, 2019 as follows: Mr. Abel-22,166; Mr. Behring-44,333; Ms. Cool-22,166; Mr. Cahill-633,017; Mr. Lemann-22,166; Mr. Zoghbi-180,799; and all of our current executive officers as a group-2,130,954.


~~(3)~~	Includes RSUs and deferred shares held in the stock deferral plan under the Kraft Heinz Deferred Compensation Plan for Non-Management Directors. These shares accumulate dividends, which are reinvested in common stock. For a description of these deferred shares, see “Compensation of Non-Employee Directors” above.


~~(4)~~	~~Mr. Cahill’s holdings include 148,321 shares of common stock held in grantor retained annuity trusts.~~


~~(5)~~	This group includes, in addition to the individuals named in the table, Pedro Drevon, Rodrigo Wickbold, and Nina Barton, who collectively have 29,591 beneficially owned shares and exercisable stock options.

~~The following table displays information about persons we know were the~~security ownership of certain beneficial owners and management is included under the heading Beneficial Ownership of ~~more than 5% of~~Kraft Heinz Stock in our ~~outstanding common stock as of June 5, 2019.~~2022 Proxy Statement. This information is incorporated by reference into this Annual Report on Form 10-K.

Name and Address of Beneficial Owner
Amount and
Nature of
Beneficial
Ownership

Percent
of
Common
Stock⁽¹⁾
3G Funds⁽²⁾
c/o 3G Capital, Inc.
600 Third Avenue 37th Floor
New York, New York 10016
270,097,373 22.1%
Warren E. Buffett⁽³⁾
Berkshire Hathaway
3555 Farnam Street
Omaha, Nebraska 68131
325,442,152 26.7%


~~(1)~~	~~Calculated based on 1,219,938,804 shares of our outstanding common stock as of June 5, 2019.~~

~~(2)~~

Based on the Schedule 13G/A filed on January 18, 2019 by (i) 3G Global Food Holdings, a Cayman Islands limited partnership, (ii) 3G Global Food Holdings GP LP, a Cayman Islands limited partnership (“3G Global Food Holdings GP”), (iii) 3G Capital Partners II LP, a Cayman Islands limited partnership (“3G Capital Partners II”), (iv) 3G Capital Partners Ltd., a Cayman Islands exempted company (“3G Capital Partners Ltd”), and (v) 3G Capital Partners LP, a Cayman Islands limited partnership (“3G Capital Partners LP” and, together with 3G Global Food Holdings, 3G Global Food Holdings GP, 3G Capital Partners II and 3G Capital Partners Ltd, the “3G Funds”). According to the Schedule 13G/A filing, the 3G Funds own dispositive power over an aggregate of 270,097,373 shares of Kraft Heinz common stock. As a result of the relationships described above under “Independence and Related Person Transactions” in Item 13, ~~Certain Relationships and Related Transactions, and Director Independence~~, Berkshire Hathaway, Mr. Buffett and the 3G Funds may be deemed to be a group for purposes of Section 13(d) of the Exchange Act and therefore may be deemed to hold 595,539,525 shares of Kraft Heinz common stock.

~~(3)~~

Based on the Schedule 13G/A filed on February 15, 2017 by Warren E. Buffett and Berkshire Hathaway. As a result of the relationships described above under “Independence and Related Person Transactions” in Item 13, ~~Certain Relationships and Related Transactions, and Director Independence~~, Berkshire Hathaway, Mr. Buffett and the 3G Funds may be deemed to be a group for purposes of Section 13(d) of the Exchange Act and therefore may be deemed to hold 616,169,839 shares of Kraft Heinz common stock.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

~~INDEPENDENCE AND RELATED PERSON TRANSACTIONS~~

~~Independence Determinations~~

The Guidelines require that a majority of the directors meet Nasdaq listing standards’ “independence” requirements. For a director to be considered independent, the Board must affirmatively determine, after reviewing all relevant information, that a director has no direct or indirect material relationship with Kraft Heinz that would interfere with his or her exercise of independent judgment in carrying out his or her responsibilities as a director. The Board determined that,Information required by this Item 13 is included under the ~~Nasdaq listing standards, the following director nominees are independent: Mr. Abel, Mr. Behring, Ms. Cool, Mr. Dewan, Ms. Jackson, Mr. Lemann, Mr. Pope, Mr. Castro-Neves,~~heading Corporate Governance and ~~Mr. Van Damme. Warren Buffett and Mackey McDonald, who retired from~~ Board service in 2018, and Marcel Herrmann Telles, who decided to retire from the Board, effective on June 12, 2019, were also determined to be independent during the periods they served. Mr. Cahill, the former Chief Executive Officer of Kraft and a current consultant to Kraft Heinz, and George Zoghbi, our former Chief Operating Officer of the U.S. Commercial business and Special Advisor at Kraft Heinz, are not independent.

In conducting its evaluations of Mr. Abel, Mr. Buffett, and Ms. Cool, the Board considered each individual’s affiliation with Berkshire Hathaway, which held approximately 27% of our outstanding common stock as of June 5, 2019, and its subsidiaries. Similarly, in conducting its evaluations of Mr. Behring, Mr. Lemann, Mr. Castro-Neves, and Mr. Telles, the Board considered each individual’s affiliation with 3G Capital, which held approximately 22% of our outstanding common stock as of June 5, 2019, and its subsidiaries. The Board also considered the service of Messrs. Behring, Castro-Neves, and Van Damme on the Board of Directors of RBI, a company in which 3G Capital invests and the parent company of Burger King and Tim Hortons, quick service restaurant companies that purchase certain of our products and conduct certain brand sponsorship and marketing activities for us, in conducting its evaluations of them.

~~Review of~~Matters—Related Person Transactions ~~with Related Persons~~

The Board has adopted a written policy regarding the review, approval, or ratification of “related person transactions.” A “related person transaction” is one in which Kraft Heinz is a participant, the amount involved exceeds $120,000, and any “related person” had, has, or will have a direct or indirect material interest. In general, “related persons” include our directors, executive officers, and 5% stockholders and their immediate family members. In accordance with this policy, the Governance Committee reviews transactions that might qualify as “related person transactions.” If the Governance Committee determines that a transaction qualifies as a “related person transaction,” then the Governance Committee reviews, and approves, disapproves, or ratifies the “related person transaction.” The Governance Committee approves or ratifies only those “related person transactions” that are fair and reasonable to Kraft Heinz and in our ~~and our stockholders’ best interests. Any member of the Governance Committee who~~2022 Proxy Statement. This information is a “related person” with respect to a transaction under review may not participate in the deliberations or decisions regarding the transaction. The chair of the Governance Committee (or the Chair of the Audit Committee if the chair of the Governance Committee is a “related person” with respect to the transaction under review) will review and approve or ratify potential “related person transactions” when it is not practicable or desirable to delay review of a transaction until a Governance Committee meeting, and will report to the Governance Committee any transaction so approved or ratified. The Governance Committee, in the course of its review and approval or ratification of a related person transaction underincorporated by reference into this ~~policy, considers, among other things:~~

~~the commercial reasonableness of the transaction;~~

~~the materiality of the related person’s direct or indirect interest in the transaction;~~

~~whether the transaction may involve an actual, or the appearance of a, conflict of interest;~~

~~the impact of the transaction on the related person’s independence (as defined in the Guidelines and the Nasdaq listing standards); and~~

~~whether the transaction would violate any provision of our Directors Ethics Code or Code of Conduct.~~

~~Registration Rights Agreement~~

In connection with the 2015 Merger, we entered into a registration rights agreement with 3G Global Food Holdings and Berkshire Hathaway. Pursuant to the registration rights agreement, we granted 3G Global Food Holdings and Berkshire Hathaway registration rights with respect to the shares of Kraft Heinz common stock held by 3G Global Food Holdings and Berkshire Hathaway as of the date of the closing of the 2015 Merger, representing shares of Kraft Heinz common stock acquired from Heinz in connection with the 2015 Merger and/or immediately prior to the 2015 Merger pursuant to a warrant. The registration rights only apply to registrable shares and not shares of Kraft Heinz common stock subsequently acquired by either party. These rights include demand registration rights, shelf registration rights, and “piggyback” registration rights, as well as customary indemnification. The rights are subject to certain holdback and suspension periods. We generally will bear all fees, costs, and expenses related to registrations, other than underwriting discounts and commissions attributable to the sale of shares of Kraft Heinz common stock by 3G Global Food Holdings and Berkshire Hathaway, as applicable.

~~Demand Registration Rights~~

The registration rights agreement grants each of 3G Global Food Holdings and Berkshire Hathaway demand registration rights. We will be required, upon the written request of 3G Global Food Holdings or Berkshire Hathaway, to file a registration statement pursuant to its demand rights under the registration rights agreement, as promptly as practicable and to use our reasonable best efforts to effect registration of shares of Kraft Heinz common stock requested to be registered by 3G Global Food Holdings or Berkshire Hathaway, subject to certain exceptions. Each of 3G Global Food Holdings and Berkshire Hathaway may request up to three demand registrations in the aggregate.

~~Shelf Registration Rights~~

~~The registration rights agreement also grants each of 3G Global Food Holdings and Berkshire Hathaway shelf registration rights. Subject to our eligibility to use a Registration Statement~~Annual Report on Form S-3, each of 3G Global Food Holdings and Berkshire Hathaway may request that we file a shelf registration statement with respect to some or all of its shares of Kraft Heinz common stock, and, upon such request, we are required to file such registration statement promptly as practicable, subject to certain exceptions.10-K.

~~“Piggyback” Registration Rights~~

The registration rights agreement grants each of 3G Global Food Holdings and Berkshire Hathaway “piggyback” registration rights. If we register any of our shares of common stock, either for our own account or for the account of other stockholders, each of 3G Global Food Holdings and Berkshire Hathaway will be entitled, subject to certain exceptions, to include its shares of common stock in the registration.

~~Holdback Periods~~

Notwithstanding the registration rights described above, if there is an offering of shares of Kraft Heinz and the managing underwriters for the offering advise us that a public sale or distribution of shares outside the offering would adversely affect the offering, then, if requested, each of 3G Global Food Holdings and Berkshire Hathaway will not dispose of, or request the registration of, any registrable shares for a certain period, which we refer to as a holdback period. The holdback period will begin on the 10th day before the pricing date of the offering and extend for either (i) 120 days or (ii) an earlier date, if designated by the managing underwriters.

~~Suspension Periods~~

In addition, we may delay or suspend the filing, effectiveness, or use of a registration statement for a certain period, which we refer to as a suspension period, if we determine that (i) proceeding with the use or effectiveness of the registration statement would require us to disclose material non-public information and the disclosure of that information at that time would not be in our best interests or (ii) the registration or offering to be delayed or suspended would, if not delayed or suspended, materially adversely affect us or delay or otherwise materially adversely affect the success of any pending or proposed material transaction, including any debt or equity financing, any acquisition or disposition, any recapitalization or reorganization or any other material transaction, whether due to commercial reasons, a desire to avoid premature disclosure of information, or any other reason. During any calendar year, there will not be more than two suspension periods and the aggregate number of days included in all suspension periods in that year will not exceed 119 days.

~~Shareholders’ Agreement~~

In connection with the 2015 Merger, 3G Global Food Holdings and Berkshire Hathaway entered into a shareholders’ agreement that governs how each party and their affiliates will vote the shares of Kraft Heinz common stock held by them as of the date of closing of the 2015 Merger, with respect to supporting certain directors who are designated by either 3G Global Food Holdings or Berkshire Hathaway. Pursuant to the shareholders’ agreement, 3G Global Food Holdings agrees that for so long as Berkshire Hathaway and its affiliates control shares representing at least 66% of the voting power in election of directors of shares owned by Berkshire Hathaway as of the consummation of the 2015 Merger, 3G Global Food Holdings and its affiliates will vote their shares of Kraft Heinz common stock in favor of the three Kraft Heinz Board nominees designated by Berkshire Hathaway and not take any action to remove such designees without Berkshire Hathaway’s consent. Similarly, Berkshire Hathaway agrees that for so long as 3G Global Food Holdings and its affiliates control shares representing at least 66% of the voting power in elections of directors of shares owned by 3G Global Food Holdings as of the consummation of the 2015 Merger, Berkshire Hathaway and its affiliates will vote their shares of Kraft Heinz common stock in favor of the three Kraft Heinz Board nominees designated by 3G Global Food Holdings and not take any action to remove such designees without 3G Global Food Holdings’ consent. The shareholders’ agreement provides that each party’s foregoing rights and obligations will step down upon specified reductions in ownership below the 66% threshold described above by either 3G Global Food Holdings or Berkshire Hathaway and their respective affiliates, as applicable.

~~Consulting Agreement~~

On November 2, 2017, we entered into a consulting agreement with Mr. Cahill pursuant to which he provides advisory and consulting services to us related to current and historical finances, relationships with licensors, customers and vendors, employee matters, product development, marketing and distribution, government affairs and strategic opportunities. Mr. Cahill is paid $500,000 annually under this new consulting agreement, which was approved by the disinterested members of the Board. Mr. Cahill’s services under the consulting agreement are distinct from his duties as a director. Previously, Mr. Cahill had provided similar services under a consulting agreement entered into following the 2015 Merger, which had expired in July 2017.

~~Compensation Arrangement~~

Effective January 1, 2017, the Company entered into an offer letter (the “Offer Letter”) with Mr. Zoghbi in order to incent Mr. Zoghbi to extend his service with the Company past January 1, 2017, after a retention bonus pursuant to a prior offer letter entered into upon the closing of the 2015 Merger had been earned. Under the Offer Letter, Mr. Zoghbi: (i) continued his current base salary of $850,000; (ii) agreed to a 2017 target annual incentive award opportunity of 200% (with a maximum bonus multiplier of 130%); and (iii) was granted a long-term equity incentive award. The long-term equity incentive award was composed of (i) RSUs, which cliff vest after three years, and (ii) PSUs, which cliff vest after three years based on the achievement of U.S. sales growth targets and U.S. Adjusted EBITDA growth targets. The Offer Letter also eliminated the Section 280G gross-up rights that Mr. Zoghbi had been granted by Kraft compensation plans prior to the 2015 Merger. In October 2017, Mr. Zoghbi transitioned from his role as President of the U.S. Commercial business to his role as Special Advisor. As previously disclosed, Mr. Zoghbi was not eligible under the Offer Letter for an annual incentive award in 2018 based on 2017 performance. For as long as Mr. Zoghbi continues to serve as a Special Advisor at Kraft Heinz, it is anticipated that he will not receive compensation for his services as a director.

Item 14. Principal ~~Accounting~~Accountant Fees and Services.

Information required by this Item 14 is included under the headings Proposal 4. Ratification of the Selection of Independent Auditors—Independent Auditors’ Fees

~~Aggregate fees for professional services rendered~~ and Services and Proposal 4. Ratification of the Selection of Independent Auditors—Pre-Approval Policy in our 2022 Proxy Statement. This information is incorporated by ~~our independent auditors, PricewaterhouseCoopers LLP, are set forth in the table below (in thousands). All fees below include out-of-pocket expenses.~~reference into this Annual Report on Form 10-K.

115

For the Year Ended
December 29, 2018 December 30, 2017
Audit Fees⁽¹⁾
$ 19,234
$ 9,353
Audit-Related Fees⁽²⁾
442
401
Tax Fees⁽³⁾
1,171
1,009
All Other Fees⁽⁴⁾
46
5
Total $ 20,893
$ 10,768

~~(1)~~

Include (a) the audit of our consolidated financial statements, including statutory audits of the financial statements of certain of our affiliates, and (b) the reviews of our unaudited condensed consolidated interim financial statements (quarterly financial statements). The increase from 2017 to 2018 primarily related to audit overruns associated with the procurement investigation, restatement, and impairment of goodwill and intangible assets.


~~(2)~~	~~Include professional services in connection with accounting consultations and procedures related to various other audit and special reports.~~


~~(3)~~	~~Include professional services in connection with tax compliance and advice.~~


~~(4)~~	~~Consist principally of software license fees related to research and benchmarking.~~

~~Pre-Approval Policy~~

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other permissible non-audit services. The pre-approval authority details the particular service or category of service that the independent auditors will perform. The Audit Committee’s policy also requires management to report at Audit Committee meetings throughout the year on the actual fees charged by the independent auditors for each category of service. The Audit Committee reviews this policy annually.

During the year, circumstances may arise when it may be necessary to engage the independent auditors for additional services not contemplated in the original pre-approval authority. In those instances, the Audit Committee approves the services before we engage the independent auditors. If pre-approval is needed before a scheduled Audit Committee meeting, the Audit Committee delegated pre-approval authority to its chair. The chair must report on such pre-approval decisions at the committee’s next regular meeting.

~~During fiscal year 2018, the Audit Committee pre-approved all audit and non-audit services provided by the independent auditors.~~

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) Index to Consolidated Financial Statements and Schedules



	Page No.
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)		5846
Consolidated Statements of Income for the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017,~~26, 2020, and December ~~31, 2016~~28, 2019		6049
Consolidated Statements of Comprehensive Income for the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017,~~26, 2020, and December ~~31, 2016~~28, 2019		6150
Consolidated Balance Sheets at December ~~29, 2018~~25, 2021 and December ~~30, 2017~~26, 2020		6251
Consolidated Statements of Equity for the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017,~~26, 2020, and December ~~31, 2016~~28, 2019		6352
Consolidated Statements of Cash Flows for the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017,~~26, 2020, and December ~~31, 2016~~28, 2019		6453
Notes to the Consolidated Financial Statements		6654
Financial Statement Schedule - Valuation and Qualifying Accounts for the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017,~~26, 2020, and December ~~31, 2016~~28, 2019		S-~~S-1~~1

Schedules other than those listed above have been omitted either because such schedules are not required or are not applicable.

(b) The following exhibits are filed as part of, or incorporated by reference into, this Annual Report:



Exhibit No.						Descriptions
2.1						Separation and Distribution Agreement, dated September 27, 2012, between ~~Mondelēz International, Inc. (formerly known as~~ Kraft Foods Inc.) and Kraft Foods Group, Inc.~~, dated as of September 27, 2012~~ (incorporated by reference to Exhibit 2.1 toof Amendment No. 1 to Kraft Foods Group, Inc.’s Registration Statement on Form S-4 (File No. 333-184314), filed on October 26, 2012).+
2.2						Canadian Asset Transfer Agreement, dated September 29, 2012, between ~~Mondelēz~~Mondelez Canada Inc. and Kraft Canada Inc.~~, dated as of September 29, 2012~~ (incorporated by reference to Exhibit 2.2 toof Amendment No. 2 to Kraft Foods Group, Inc.’s Registration Statement on Form S-4 (File No. 333-184314), filed on December 4, 2012).+
2.3						Master Ownership and License Agreement Regarding Patents, Trade Secrets and Related Intellectual Property, effective October 1, 2012, between Kraft Foods Global Brands LLC, Kraft Foods Group Brands LLC, Kraft Foods UK Ltd., and Kraft Foods R&D Inc.~~, dated as of October 1, 2012~~ (incorporated by reference to Exhibit 2.3 toof Amendment No. 2 to Kraft Foods Group, Inc.’s Registration Statement on Form S-4 (File No. 333-184314), filed on December 4, 2012).+
2.4						Master Ownership and License Agreement Regarding Trademarks and Related Intellectual Property, dated September 27, 2012, between Kraft Foods Global Brands LLC and Kraft Foods Group Brands LLC.~~, dated as of September 27, 2012~~ (incorporated by reference to Exhibit 2.4 toof Amendment No. 2 to Kraft Foods Group, Inc.’s Registration Statement on Form S-4 (File No. 333-184314), filed on December 4, 2012).+


2.5
~~2.5~~	Agreement and Plan of Merger, dated ~~as of~~ March 24, 2015, ~~by and~~ among H.J. Heinz Holding Corporation, Kite Merger Sub Corp., Kite Merger Sub LLC, and Kraft Foods Group, Inc. (incorporated by reference to Exhibit 2.1 toof the Company’s Registration Statement on Form S-4 (File No. 333-203364), filed on April 10, 2015).+
2.6		First Amendment to the Master Ownership and License Agreement Regarding Trademarks and Related Intellectual Property, ~~by and~~effective July 15, 2013, between Intercontinental Great Brands LLC and ~~Kraft~~GroceryCo IPCo Foods Group Brands LLC ~~effective as of July 15, 2013~~ (incorporated by reference to Exhibit 2.2 toof Kraft Foods Group, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2015 (File No. ~~1-35491)~~001-35491), filed on April 28, 2015).
2.7		Second Amendment to the Master Ownership and License Agreement Regarding Trademarks and Related Intellectual Property, ~~by and~~effective October 1, 2014, between ~~Intercontinental Great Brands LLC and~~ Kraft Foods Group Brands LLC ~~effective as of October 1, 2014~~and Intercontinental Great Brands LLC (incorporated by reference to Exhibit 2.3 toof Kraft Foods Group, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2015 (File No. ~~1-35491)~~001-35491), filed on April 28, 2015).
2.8		Amendment to the Master Ownership and License Agreement regarding Trademarks and Related Intellectual Property, ~~by and~~effective September 28, 2016, between ~~Intercontinental Great Brands LLC and~~ Kraft Foods Group Brands LLC ~~effective as of September 28, 2016~~and Intercontinental Great Brands LLC (incorporated by reference to Exhibit 2.1 toof the Company’s Quarterly Report on Form 10-Q for the quarterly period ended July 1, 2017 (File No. ~~1-37482)~~001-37482), filed on August 4, 2017).
2.9		Addendum to Master Ownership and License Agreement Regarding Patents, Trade Secrets, and Related Intellectual Property, ~~by and~~dated May 9, 2017, between Intercontinental Great Brands LLC, ~~Mondelç~~Mondelēz UK LTD, Kraft Foods R&D Inc., and Kraft Foods Group Brands LLC ~~dated as of May 9, 2017~~ (incorporated by reference to Exhibit 2.2 toof the Company’s Quarterly Report on Form 10-Q for the quarterly period ended July 1, 2017 (File No. ~~1-37482)~~001-37482), filed on August 4, 2017).

116


2.10		Further Amendment to the Master Ownership and License Agreement regarding Trademarks and Related Intellectual Property, effective September 28, 2018, between Kraft Foods Group Brands LLC and Intercontinental Great Brands LLC (incorporated by reference to Exhibit 2.10 of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (File No. 001-37482), filed on February 14, 2020).
3.1		Second Amended and Restated Certificate of Incorporation of H.J. Heinz Holding Corporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 2, 2015).
3.2		Amended and Restated ~~By-laws~~By-Laws of The Kraft Heinz Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on October 27, 2017).
3.3		Certificate of Retirement of Series A Preferred Stock of The Kraft Heinz Company, dated June 7, 2016 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on June 7, 2016).
4.1		Amended and Restated Registration Rights Agreement, dated ~~as of~~ July 2, 2015, ~~by and~~ among ~~the~~The Kraft Heinz Company, 3G Global Food Holdings LP, and Berkshire Hathaway Inc. (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 2, 2015).
4.2		Indenture, dated ~~as of~~ July 1, 2015, ~~governing debt securities by and~~ among H. J. Heinz Company, as issuer, H.J. Heinz Holding Corporation, as guarantor, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
4.3		First Supplemental Indenture, dated ~~as of~~ July 1, 2015, ~~governing~~relating to the 2.000% Senior Notes due 2023, ~~by and~~ among H. J. Heinz Company, as issuer, H.J. Heinz Holding Corporation, as guarantor, Wells Fargo Bank, National Association, as trustee, and Société Générale Bank & Trust, as paying agent, security registrar, and transfer agent (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
4.4		Second Supplemental Indenture, dated ~~as of~~ July 1, 2015, ~~governing~~relating to the 4.125% Senior Notes due 2027, ~~by and~~ among H. J. Heinz Company, as issuer, H.J. Heinz Holding Corporation, as guarantor, Wells Fargo Bank, National Association, as trustee, and Société Générale Bank & Trust, as paying agent, security registrar, and transfer agent (incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
4.5		Third Supplemental Indenture, dated ~~as of~~ July 2, 2015, ~~governing~~relating to the 1.60% Senior Notes due 2017, ~~the~~ 2.00% Senior Notes due 2018, ~~the~~ 2.80% Senior Notes due 2020, ~~the~~ 3.50% Senior Notes due 2022, ~~the~~ 3.95% Senior Notes due 2025, ~~the~~ 5.00% Senior Notes due 2035, and ~~the~~ 5.20% Senior Notes due 2045, ~~by and~~ among H. J. Heinz Company, as issuer, H.J. Heinz Holding Corporation, as guarantor, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.6 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
4.6		Indenture, dated as of July 6, 2015, governing debt securities by and among Kraft Canada Inc., as issuer, The Kraft Heinz Company and Kraft Heinz Foods Company, as guarantors, and Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 4.9 of the Company’s Current Report on Form 8-K (File No. 1-37482), filed on July 6, 2015).
~~4.7~~	Second Supplemental Indenture dated as of July 6, 2015, governing the Floating Rate Senior Notes due 2020, by and among Kraft Canada Inc., as issuer, The Kraft Heinz Company and Kraft Heinz Foods Company, as guarantors, and Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 4.12 of the Company’s Current Report on Form 8-K (File No. 1-37482), filed on July 6, 2015).
~~4.8~~	Third Supplemental Indenture dated as of July 6, 2015, governing the 2.70% Senior Notes due 2020, by and among Kraft Canada Inc., as issuer, The Kraft Heinz Company and Kraft Heinz Foods Company, as guarantors, and Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 4.14 of the Company’s Current Report on Form 8-K (File No. 1-37482), filed on July 6, 2015).



~~4.9~~	~~Form of the 2.70% Senior Notes due 2020 (included in Exhibit 4.8).~~
~~4.10~~	Guarantee Agreement dated as of July 6, 2015, by and among The Kraft Heinz Company and Kraft Heinz Foods Company, as guarantors, and Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 4.16 of the Company’s Current Report on Form 8-K (File No. 1-37482), filed on July 6, 2015).
~~4.11~~	~~Indenture by and~~June 4, 2012, between Kraft Foods Group, Inc. and Deutsche Bank Trust Company Americas, as trustee ~~dated as of June 4, 2012~~ (incorporated by reference to Exhibit 10.4 of Amendment No. 3 to Kraft Foods Group, Inc.’s Registration Statement on Form 10 (File No. ~~1-35491)~~001-35491), filed on June 21, 2012).
~~4.12~~4.7		Supplemental Indenture No. 1, bydated June 4, 2012, relating to the 1.625% Notes due 2015, 2.250% Notes due 2017, 3.500% Notes due 2022, and ~~between~~5.000% Notes due 2042, among Kraft Foods Group, Inc., ~~Mondelēz International, Inc. (formerly known as~~ Kraft Foods Inc.), as guarantor, and Deutsche Bank Trust Company Americas, as trustee ~~dated as of June 4, 2012~~ (incorporated by reference to Exhibit 10.5 of Amendment No. 3 to Kraft Foods Group, Inc.’s Registration Statement on Form 10 (File No. ~~1-35491)~~001-35491), filed on June 21, 2012).
~~4.13~~4.8		Supplemental Indenture No. 2, bydated July 18, 2012, relating to the 6.125% Senior Notes due 2018, 5.375% Senior Notes due 2020, 6.875% Senior Notes due 2039, and ~~between~~6.500% Senior Notes due 2040, among Kraft Foods Group, Inc., ~~Mondelēz International, Inc. (formerly known as~~ Kraft Foods Inc.), as guarantor, and Deutsche Bank Trust Company Americas, as trustee ~~dated as of July 18, 2012~~ (incorporated by reference to Exhibit 10.27 of Amendment No. 5 to Kraft Foods Group, Inc.’s Registration Statement on Form 10 (File No. ~~1-35491)~~001-35491), filed on August 6, 2012).
~~4.14~~4.9		Supplemental Indenture No. 3, dated ~~as of~~ July 2, 2015, ~~governing the 2.250% Notes due 2017, 6.125% Notes due 2018, 5.375% Notes due 2020, 3.500% Notes due 2022, 6.875% Notes due 2039, 6.500% Notes due 2040 and 5.000% Notes due 2042, by and~~ among Kraft Foods Group, Inc., as issuer, ~~H. J. Heinz Company, as successor,~~Kite Merger Sub LLC, H.J. Heinz Holding Corporation, as parent guarantor, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.17 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
~~4.15~~4.10		Third Supplemental Indenture, dated July 2, 2015, ~~governing~~relating to the 6.75% Debentures due 2032 and 7.125% Debentures due 2039, ~~by and~~ among H.J. Heinz Holding Corporation, H. J. Heinz Company, and The Bank of New York Mellon, ~~(as~~as successor trustee to Bank One, National ~~Association)~~Association (incorporated by reference to Exhibit 4.18 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
~~4.16~~4.11		Third Supplemental Indenture, dated July 2, 2015, ~~governing~~relating to the 6.375% Debentures due 2028, ~~by and~~ among H.J. Heinz Holding Corporation, H. J. Heinz Company, and The Bank of New York Mellon, ~~(as~~as successor trustee to Bank One, National ~~Association)~~Association (incorporated by reference to Exhibit 4.19 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).
~~4.17~~4.12		Indenture, dated July 6, 2001, among ~~H. J. Heinz Corporation II,~~ H. J. Heinz Finance Company, as issuer, H.J. Heinz Company, as guarantor, and ~~The~~ Bank ~~of New York Mellon (as successor trustee) dated~~One, National Association, as ~~of July 6, 2001 governing the 6.75% Guaranteed Notes due 2032 and the 7.125% Guaranteed Notes due 2039~~trustee (incorporated herein by reference to Exhibit 4(c) toof H. J. Heinz Company’s Annual Report on Form 10-K for the fiscal year ended May 1, 2002 (File No. ~~1-3385)~~001-03385), filed on July 30, 2002).

117


~~4.18~~4.13		Indenture, dated July 15, 2008, among ~~H. J.~~H.J. Heinz Company and ~~MUFG~~ Union Bank of California, N.A. ~~(as successor trustee) dated~~, as ~~of July 15, 2008 governing the 2.000% Notes due 2016, the 3.125% Notes due 2021, the 1.50% Notes due 2017, and the 2.85% Notes due 2022~~trustee (incorporated herein by reference to Exhibit 4(d) toof H. J. Heinz Company’s Annual Report on Form 10-K for the fiscal year ended April 29, 2009 (File No. ~~1-3385)~~001-03385), filed on June 17, 2009).
~~4.19~~4.14		First Supplemental Indenture, dated July 2, 2015, relating to the 2.00% Notes due September 2016, 1.50% Notes due March 2017, 3.125% Notes due September 2021, and 2.85% Notes due March 2022, among H.J. Heinz Holding Corporation, H. J. Heinz Company, and MUFG Union Bank, N.A., as trustee (incorporated by reference to Exhibit 4.14 to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 2020 (File No. 001-37482), filed on February 17, 2021).
4.15		Supplemental Indenture No. 4, dated ~~as of~~ November 11, 2015, relating to the ~~Indenture, by~~2.250% Notes due 2017, 6.125% Notes due 2018, 5.375% Notes due 2020, 3.500% Notes due 2022, 6.875% Notes due 2039, 6.500% Notes due 2040, and 5.000% Notes due 2042, between Kraft Heinz Foods ~~Group, Inc.~~Company and Deutsche Bank Trust Company Americas, as trustee ~~dated as of June 4, 2012~~ (incorporated by reference to Exhibit 4.21 toof the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016 (File No. ~~1-37482)~~001-37482), filed on March 3, 2016).
~~4.20~~4.16		Second Lien Security Agreement, dated as of June 7, 2013, by and among Hawk Acquisition Intermediate Corporation II, and certain of its subsidiaries, collectively, as the Initial Grantors, and Wells Fargo Bank, National Association, as Collateral Agent (incorporated by reference to Exhibit 10.6 to H. J. Heinz Company’s Current Report on Form 8-K (File No. 1-3385), dated June 13, 2013).
~~4.21~~	Second Lien Intellectual Property Security Agreement, dated June 7, 2013 by the persons listed on the signature pages thereof in favor of Wells Fargo Bank, National Association, as collateral agent for the Secured Parties (incorporated by reference to Exhibit 10.7 to H. J. Heinz Company’s Current Report on Form 8-K (File No. 1-3385), dated June 13, 2013).
~~4.22~~	Indenture, dated as of January 30, 2015, by and among H. J. Heinz Corporation II, the Guarantors party hereto, Wells Fargo Bank, National Association, as Collateral Agent and MUFG Union Bank, N.A. as Trustee, relating to H. J. Heinz Corporation II’s $2,000,000,000 4.875% Second Lien Senior Secured Notes due 2025 (incorporated by reference to Exhibit 4.1 of H. J. Heinz Corporation II’s Current Report on Form 8-K (File No. 444-194441), dated February 5, 2015).
~~4.23~~	~~Indenture by and~~July 15, 1992, between H. J. Heinz Company ~~(as successor issuer),~~ and The First National Bank of ~~New York Mellon (as successor trustee) dated~~Chicago, as ~~of July 15, 1992~~trustee (incorporated by reference to Exhibit 4(a) toof H. J. Heinz Company’s Registration Statement on Form S-3 (File No. 333-48017), filed on March 16, 1998).
~~4.24~~4.17		Fourth Supplemental Indenture, dated ~~as of~~ May 24, 2016, ~~governing~~relating to the 3.000% Senior Notes due 2026 and ~~the~~ 4.375% Senior Notes due 2046, ~~by and~~ among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on May 25, 2016).


4.18
~~4.25~~	Form of ~~the~~ 3.000% Senior Notes due 2026 and ~~the~~ 4.375% Senior Notes due 2046 (included in Exhibit 4.24).
~~4.26~~4.19		Fifth Supplemental Indenture, dated ~~as of~~ May 25, 2016, ~~governing~~relating to the 1.500% Senior Notes due 2024 and ~~the~~ 2.250% Senior Notes due 2028, ~~by and~~ among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee, paying agent, security registrar, and transfer agent (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on May 25, 2016).
~~4.27~~4.20		Form of ~~the~~ 1.500% Senior Notes due 2024 and ~~the~~ 2.250% Senior Notes due 2028 (included in Exhibit 4.26).
~~4.28~~4.21		Sixth Supplemental Indenture, dated ~~as of~~ August 10, 2017, ~~governing~~relating to the ~~floating rate~~Floating Rate Senior Notes due 2019, ~~the floating rate~~Floating Rate Senior Notes due 2021, and ~~the floating rate~~Floating Rate Senior Notes due 2022, among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee, paying agent, security registrar, and calculation agent (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on August 10, 2017).
4.22		Form of Floating Rate Senior Notes due 2019, Floating Rate Senior Notes due 2021, and Floating Rate Senior Notes due 2022 (included in Exhibit 4.28).
4.23		Seventh Supplemental Indenture, dated June 15, 2018, relating to the 3.375% Senior Notes due 2021, 4.000% Senior Notes due 2023, and 4.625% Senior Notes due 2029, among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on ~~August 10, 2017)~~June 15, 2018).
~~4.29~~4.24		~~Forms~~Form of ~~floating rate Senior Notes due 2019, the floating rate Senior Notes due 2021 and the floating rate Senior Notes due 2022 (included in Exhibit 4.28).~~
~~4.30~~	~~Seventh Supplemental Indenture, dated as of June 15, 2018, governing the~~ 3.375% Senior Notes due 2021, ~~the~~ 4.000% Senior Notes due 2023, and ~~the~~ 4.625% Senior Notes due 2029 (included in Exhibit 4.30).
4.25		Description of Kraft Heinz Securities registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.32 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).
4.26		Eighth Supplemental Indenture, dated September 25, 2019, relating to the 3.750% Senior Notes due 2030, 4.625% Senior Notes due 2039, and 4.875% Senior Notes due 2049, among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on ~~June 15, 2018.~~September 25, 2019).
~~4.31~~4.27		~~Forms~~Form of ~~3.375%~~3.750% Senior Notes due ~~2021, the 4.000% Senior Notes due 2023 and the~~2030, 4.625% Senior Notes due ~~2029~~2039, and 4.875% Senior Notes due 2049 (included in Exhibit ~~4.30)~~4.33).
~~4.32~~4.28		~~Description of~~Registration Rights Agreement, dated September 25, 2019, among Kraft Heinz Foods Company, The Kraft Heinz Company, as guarantor, and BofA Securities, Inc., Citigroup Global Markets Inc., and Wells Fargo Securities, LLC, as representatives of the other initial purchasers (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on September 25, 2019).
~~10.1~~4.29		Ninth Supplemental Indenture, dated May 18, 2020, relating to the 3.875% Senior Notes due 2027, 4.250% Senior Notes due 2031, and 5.500% Senior Notes due 2050, among Kraft Heinz Foods Company, as issuer, The Kraft Heinz Company, as guarantor, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on May 18, 2020).
4.30		Form of 3.875% Senior Notes due 2027, 4.250% Senior Notes due 2031, and 5.500% Senior Notes due 2050 (included in Exhibit 4.36).

118


4.31						Registration Rights Agreement, dated May 18, 2020, among Kraft Heinz Foods Company, The Kraft Heinz Company, as guarantor, and J.P. Morgan Securities LLC, as representative of the other initial purchasers (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on May 18, 2020).
10.1						Tax Sharing and Indemnity Agreement, ~~by and~~dated September 27, 2012, between ~~Mondelēz International, Inc. (formerly known as~~ Kraft Foods Inc.) and Kraft Foods Group, Inc.~~, dated as of September 27, 2012~~ (incorporated by reference to Exhibit 10.3 toof Amendment No. 1 to Kraft Foods Group, Inc.’s Registration Statement on Form S-4 (File No. 333-184314), filed on October 26, 2012).
10.2						Form of ~~(Kraft~~Kraft Foods Group, Inc.) 2012 Performance Incentive Plan Global Stock Option Award Agreement (incorporated by reference to Exhibit 10.1 toof Kraft Foods Group, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. ~~333-35491)~~001-35491), filed on May 2, 2014).++
10.3						Form of ~~(Kraft~~Kraft Foods Group, Inc.) 2012 Performance Incentive Plan Global Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 toof Kraft Foods Group, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. ~~333-35491)~~001-35491) filed on May 2, 2014).++
10.4						~~H. J.~~H.J. Heinz Holding Corporation 2013 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 toof Amendment No. 4 to H.J. Heinz Holding Corporation’s Registration Statement on Form S-4 (File No. 333-203364), filed on May 29, 2015).++
10.5						~~Amendment, effective July 2, 2015~~Amendments to the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan (incorporated ~~herein~~ by reference to Exhibit 10.6 toof the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016 (File No. ~~1-37482)~~001-37482), filed on March 3, 2016).++
10.6						Form of ~~H. J.~~H.J. Heinz Holding Corporation 2013 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 toof Amendment No. 4 to H.J. Heinz Holding Corporation’s Registration Statement on Form S-4 (File No. 333-203364), filed on May 29, 2015).++
10.7						Kraft Foods Group, Inc. Deferred Compensation Plan ~~For~~for Non-Management Directors (incorporated by reference to Exhibit 4.3 toof Kraft Foods Group, Inc.’s Registration Statement on Form S-8 (File No. 333-183867) filed on September 12, 2012).++
10.8						Kraft Foods Group, Inc. 2012 Performance Incentive Plan (incorporated by reference to Exhibit 4.3 toof Kraft Foods Group, Inc.’s Registration Statement on Form S-8 (File No. 333-183868) filed on September 12, 2012). +++
10.9						Settlement Agreement, dated June 22, 2015, between ~~Mondelēz~~Mondelez International Inc. and Kraft Foods Group, Inc. (incorporated by reference to Exhibit 10.1 of Kraft Foods Group, Inc.’s Current Report on Form 8-K (File No. ~~1-35491)~~001-35491), filed on June 24, 2015).
10.10						Subscription Agreement, dated ~~as of July 1,~~June 30, 2015, ~~by and~~ among ~~H.J. Heinz Holding Corporation,~~ 3G Global Food Holdings LP, ~~and~~ Berkshire Hathaway Inc., and H.J. Heinz Holding Corporation (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 2, 2015).
10.11						Credit Agreement, dated ~~as of~~ July 6, 2015, ~~by and~~ among The Kraft Heinz Company, Kraft Heinz Foods Company, ~~(formerly known as H. J. Heinz Company), The Kraft Heinz Company (formerly known as H.J. Heinz Holding Corporation),~~ the initial lenders and issuing banks party thereto, JPMorgan Chase Bank, N.A., as ~~Administrative Agent~~administrative agent, and ~~JPMorgan~~J.P. Morgan Europe Limited, as London ~~Agent~~agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on July 6, 2015).


10.12
~~10.12~~	First Amendment, ~~to Credit Agreement, entered into as of~~dated May 4, 2016, to the Credit Agreement dated ~~as of~~ July 6, 2015, among The Kraft Heinz Company, Kraft Heinz Foods Company, as a borrower and a guarantor, the banks, financial institutions and other institutional lenders party thereto, the issuing banks, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Europe Limited, as London agent for the lenders (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on May 6, 2016).
10.13		The Kraft Heinz Company 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2016 (File No. 001-37482), filed on May 5, 2016).+
10.14		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement, as amended and restated (incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).+
10.15		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Matching Restricted Stock Unit Award Agreement, as amended and restated (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).+
10.16		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Restricted Stock Unit Award Agreement, as amended and restated (incorporated by reference to Exhibit 10.17 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).+
10.17		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Performance Share Award Notice (2017), as amended and restated (incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).+
10.18		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Performance Share Award Notice (2018), as amended and restated (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (File No. 001-37482), filed on June 7, 2019).+

119


10.19		Second Amendment, dated June 15, 2018, to the Credit Agreement dated July 6, 2015, among The Kraft Heinz Company, Kraft Heinz Foods Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Europe Limited, as London agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on June 15, 2018).
10.20		Offer of Employment Letter, dated July 1, 2019, between The Kraft Heinz Company and Miguel Patricio (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2019 (File No. 001-37482), filed on August 13, 2019).+
10.21		Offer of Continued Employment Letter, dated September 6, 2019, between The Kraft Heinz Company and George Zoghbi (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2019 (File No. 001-37482), filed on October 31, 2019).+
10.22		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Non-Qualified Stock Option Agreement, as amended and restated (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2019 (File No. 001-37482), filed on October 31, 2019).+
10.23		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Restricted Stock Unit Award Agreement, as amended and restated (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2019 (File No. 001-37482), filed on October 31, 2019).+
10.24		Form of The Kraft Heinz Company 2016 Omnibus Incentive Plan Performance Share Award Notice (2019), as amended and restated (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2019 (File No. 001-37482), filed on October 31, 2019).+
10.25		Letter Agreement, dated March 23, 2020, relating to the extension of the Credit Agreement dated July 6, 2015, among The Kraft Heinz Company, Kraft Heinz Foods Company, JPMorgan Chase Bank, N.A., as administrative agent, and the revolving lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on March 24, 2020).
10.26		The Kraft Heinz Company 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 (File No. 333-238073), filed on May 7, 2020).+
10.27		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.28		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Performance Share Award Notice (incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.29		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Performance Share Award Notice (Bands) (incorporated by reference to Exhibit 10.4 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.30		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.5 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.31		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Restricted Stock Unit Award Agreement for Bands B02-B09 (incorporated by reference to Exhibit 10.6 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.32		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Matching Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.7 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.33		Form of The Kraft Heinz Company 2020 Omnibus Incentive Plan Deferred Stock Award Agreement (incorporated by reference to Exhibit 10.8 of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 26, 2021 (File No. 001-37482), filed on August 4, 2021).+
10.34		Commitment Increase Amendment, dated October 9, 2020, to the Credit Agreement dated July 6, 2015, among The Kraft Heinz Company, Kraft Heinz Foods Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Europe Limited, as London agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-37482), filed on October 13, 2020).
10.35		Letter Agreement, dated April 9, 2021, relating to the extension of the Credit Agreement dated July 6, 2015, among The Kraft Heinz Company, Kraft Heinz Foods Company, the banks, financial institutions, and other institutional lenders party thereto, the issuing banks, JPMorgan Chase Bank, N.A., as ~~Administrative Agent~~administrative agent, and J.P. Morgan Europe Limited, as London agent for the lenders (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. ~~1-37482)~~001-37482), filed on ~~May 6, 2016)~~April 12, 2021).
~~10.13~~21.1		Consulting Agreement, dated as of November 2, 2017, by and between The Kraft Heinz Company and John T. Cahill (incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K (File No. 1-37482), filed on February 16, 2018).++
~~10.14~~	~~The Kraft Heinz Company 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-37482), filed on May 5, 2016).++~~
~~10.15~~	~~Form of Amended and Restated The Kraft Heinz Company 2016 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement.++~~
~~10.16~~	~~Form of Amended and Restated The Kraft Heinz Company 2016 Omnibus Incentive Plan Matching Restricted Stock Unit Award Agreement.++~~
~~10.17~~	~~Form of Amended and Restated The Kraft Heinz Company 2016 Omnibus Incentive Plan Restricted Stock Unit Award Agreement.++~~
~~10.18~~	~~Form of Amended and Restated The Kraft Heinz Company 2016 Omnibus Incentive Plan 2017 Performance Share Award Notice.++~~
~~10.19~~	~~Form of Amended and Restated The Kraft Heinz Company 2016 Omnibus Incentive Plan 2018 Performance Share Award Notice.++~~
~~10.20~~	Employment Agreement between The Kraft Heinz Company and George Zoghbi, dated as of December 16, 2016 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (File No. 1-37482), filed on February 23, 2017).++
~~10.21~~	Second Amendment to Credit Agreement, entered into as of June 15, 2018, to the Credit Agreement dated as of July 6, 2015, by and among The Kraft Heinz Company, Kraft Heinz Foods Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-37482), filed on June 15, 2018).
~~10.22~~	Waiver and Consent No. 1 to Credit Agreement, dated as of March 22, 2019, to the Credit Agreement dated as of July 6, 2015, by and among The Kraft Heinz Company, Kraft Heinz Foods Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-37482), filed on March 22, 2019.
~~10.23~~	Waiver and Consent No. 2 to Credit Agreement, dated as of May 10, 2019, to the Credit Agreement dated as of July 6, 2015, by and among The Kraft Heinz Company, Kraft Heinz Foods Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-37482), filed on May 10, 2019.
~~21.1~~	List of subsidiaries of The Kraft Heinz Company.*
~~24.1~~22.1		List of Guarantor Subsidiaries.*
23.1		Consent of PricewaterhouseCoopers LLP.*
24.1		Power of Attorney.*
31.1		Certification of Chief Executive Officer pursuant to Rule 13a 14(a)/15d 14(a) of the Securities Exchange Act of 1934.*
31.2		Certification of Chief Financial Officer pursuant to Rule 13a 14(a)/15d 14(a) of the Securities Exchange Act of 1934.*

120


32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.1						The following materials from The Kraft Heinz Company’s Annual Report on Form 10-K for the period ended December ~~29, 2018~~25, 2021 formatted in ~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated ~~Statements of Equity,~~Balance Sheets, (iv) the Consolidated ~~Balance Sheets,~~Statements of Equity, (v) the Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.*
104.1						The cover page from The Kraft Heinz Company’s Annual Report on Form 10-K for the period ended December 25, 2021, formatted in inline XBRL.*
+						~~The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.~~
++						Indicates a management contract or compensatory plan or arrangement.
*						Filed herewith.
**						Furnished herewith.

Item 16. Form 10-K Summary.

None.

121

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		The Kraft Heinz Company
Date:	~~June 7, 2019~~February 17, 2022
		By:	/s/ ~~David H. Knopf~~Paulo Basilio
			~~David H. Knopf~~Paulo Basilio
			Executive Vice President and Global Chief Financial Officer
			(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Signature

Title

Date

/s/ Miguel Patricio

Chief Executive Officer and Director

February 17, 2022

Miguel Patricio

(Principal Executive Officer)

~~Signature~~

~~Title~~

~~Date~~

/s/ ~~Bernardo Hees~~Paulo Basilio

~~Chief Executive Officer~~

~~June 7, 2019~~

~~Bernardo Hees~~

~~(Principal Executive Officer)~~

~~/s/ David H. Knopf~~

Executive Vice President and Global Chief Financial Officer

~~June 7, 2019~~February 17, 2022

~~David H. Knopf~~Paulo Basilio

(Duly Authorized Officer and Principal Financial Officer)

/s/ Vince Garlati

Vice President, Global Controller

~~June 7, 2019~~February 17, 2022

Vince Garlati

(Principal Accounting Officer)


Alexandre Behring*			Chair of the Board

John T. Cahill*			Vice Chair of the Board

John C. Pope*			Lead Director

Gregory E. Abel*			Director

João M. Castro-Neves*			Director

Lori Dickerson Fouché*			Director

Timothy Kenesey*			Director

Elio Leoni Sceti*			Director

Susan Mulder*			Director

Alexandre Behring*		~~Chairman of the Board~~

John T. Cahill*	~~Vice Chairman of the Board~~

Gregory E. Abel*	~~Director~~

Tracy Britt Cool*	~~Director~~

Feroz Dewan*	~~Director~~

Jeanne P. Jackson*	~~Director~~

Jorge Paulo Lemann*	~~Director~~

John C. Pope*	~~Director~~

Marcel Hermann Telles*	~~Director~~

~~Alexandre~~ Van Damme*		Director

George Zoghbi*	~~Director~~



*By:			/s/ ~~David H. Knopf~~Paulo Basilio
			~~David H. Knopf~~Paulo Basilio
			Attorney-In-Fact
			~~June 7, 2019~~February 17, 2022

122

The Kraft Heinz Company

Valuation and Qualifying Accounts

For the Years Ended December ~~29, 2018,~~25, 2021, December ~~30, 2017~~26, 2020, and December ~~31, 2016~~28, 2019

(in millions)


			Additions				Deductions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts(a)		Write-offs and Reclassifications		Balance at End of Period
Year ended December 25, 2021
Allowances related to trade accounts receivable	$	48	$	5	$	1	$	(6)	$	48
Allowances related to deferred taxes	105		1		—		(5)		101
	$	153	$	6	$	1	$	(11)	$	149
Year ended December 26, 2020
Allowances related to trade accounts receivable	$	33	$	21	$	—	$	(6)	$	48
Allowances related to deferred taxes	112		(3)		—		(4)		105
	$	145	$	18	$	—	$	(10)	$	153
Year ended December 28, 2019
Allowances related to trade accounts receivable	$	24	$	11	$	—	$	(2)	$	33
Allowances related to deferred taxes	81		31		—		—		112
	$	105	$	42	$	—	$	(2)	$	145

Additions Deductions
Description Balance at Beginning of Period Charged to Costs and Expenses
Charged to Other Accounts^(a)
Write-offs and Reclassifications Balance at End of Period
Year ended December 29, 2018

Allowances related to trade accounts receivable $ 23
$ 8
$ —
$ (7 ) $ 24
Allowances related to deferred taxes 80
1
—
—
81
$ 103
$ 9
$ —
$ (7 ) $ 105
Year ended December 30, 2017
Allowances related to trade accounts receivable $ 20
$ 8
$ 1
$ (6 ) $ 23
Allowances related to deferred taxes 89
(9 ) —
—
80
$ 109
$ (1 ) $ 1
$ (6 ) $ 103
Year ended December 31, 2016
Allowances related to trade accounts receivable $ 32
$ 6
$ (4 ) $ (14 ) $ 20
Allowances related to deferred taxes 83
6
—
—
89
$ 115
$ 12
$ (4 ) $ (14 ) $ 109
(a)Primarily relates to acquisitions and currency translation.


~~(a)~~	~~Primarily relates to acquisitions and currency translation.~~

S-1



PART I		61
Item 1. Business.		61
Item 1A. Risk Factors.		118
Item 1B. Unresolved Staff Comments.		2521
Item 2. Properties.		2522
Item 3. Legal Proceedings.		2522
Item 4. Mine Safety Disclosures.		2522
PART II		2522
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		2522
Item 6. ~~Selected Financial Data.~~[Reserved].		2723
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		2824
Overview		2824
Consolidated Results of Operations		3025
Results of Operations by Segment		3427
~~Critical Accounting Estimates~~		39
~~New Accounting Pronouncements~~	43
~~Contingencies~~	43
~~Commodity Trends~~	43
Liquidity and Capital Resources	4330
~~Off-Balance Sheet Arrangements and Aggregate Contractual Obligations~~Commodity Trends		4635
~~Equity and Dividends~~Critical Accounting Estimates		4735
New Accounting Pronouncements		40
Contingencies		40
Non-GAAP Financial Measures		4740
~~Supplemental Unaudited Quarterly Financial Information~~		53
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.	5645
Item 8. Financial Statements and Supplementary Data.		5846
Report of Independent Registered Public Accounting Firm		5846
Consolidated Statements of Income		6049
Consolidated Statements of Comprehensive Income		6150
Consolidated Balance Sheets		6251
Consolidated Statements of Equity		6352
Consolidated Statements of Cash Flows		6453
Notes to Consolidated Financial Statements		6654
Note 1. Basis of Presentation		6654
Note 2. ~~Restatement of Previously Issued Consolidated Financial Statements~~Significant Accounting Policies		6755
Note 3. ~~Significant~~New Accounting ~~Policies~~Standards		8260
Note 4. ~~New Accounting Standards~~Acquisitions and Divestitures		8660
Note 5. ~~Acquisitions and Divestitures~~Restructuring Activities		8966
Note 6. ~~Integration and Restructuring Expenses~~Restricted Cash		9267
Note 7. ~~Restricted Cash~~Inventories		9468
Note 8. ~~Inventories~~		94
~~Note 9.~~ Property, Plant and Equipment	9568
Note ~~10.~~9. Goodwill and Intangible Assets		9568
Note ~~11.~~10. Income Taxes		9974
Note ~~12.~~11. Employees’ Stock Incentive Plans		~~103~~76
Note ~~13.~~12. Postemployment Benefits		~~106~~80
Note ~~14.~~13. Financial Instruments		~~116~~90
Note ~~15.~~14. Accumulated Other Comprehensive Income/~~(Loss)~~(Losses)		~~121~~96
Note 15. Financing Arrangements		98
Note 16. ~~Venezuela - Foreign Currency~~Commitments and ~~Inflation~~Contingencies		~~123~~99
Note 17. Debt		100
Note 18. Leases		107
Note 19. Capital Stock		109
Note 20. Earnings Per Share		109
Note 21. Segment Reporting		110



Note ~~17. Financing Arrangements~~22. Other Financial Data		~~124~~112
~~Note 18. Commitments and Contingencies~~		~~125~~
~~Note 19. Debt~~	~~127~~
~~Note 20. Capital Stock~~	~~130~~
~~Note 21. Earnings Per Share~~	~~131~~
~~Note 22. Segment Reporting~~	~~131~~
~~Note 23. Quarterly Financial Data (Unaudited)~~	~~134~~
~~Note 24. Supplemental Guarantor Information~~	~~200~~
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	~~215~~114
Item 9A. Controls and Procedures.		~~215~~114
Item 9B. Other Information.		~~217~~115
~~PART III~~Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.		~~217~~115
PART III		115
Item 10. Directors, Executive Officers and Corporate Governance.		~~217~~115
~~Executive Officers~~		~~217~~
~~Board of Directors~~	~~217~~
~~Corporate Governance and Board Matters~~	~~220~~
~~Board Committees and Membership—Audit Committee~~	~~221~~
~~Board Committees and Membership—Operations and Strategy Committee~~	~~221~~
Item 11. Executive Compensation.	~~222~~115
~~Board Committees and Membership—Compensation Committee~~		~~222~~
~~Compensation of Non-Employee Directors~~	~~223~~
~~Compensation Discussion and Analysis~~	~~224~~
~~Executive Compensation Tables~~	~~231~~
~~Pay Ratio Disclosure~~	~~238~~
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	~~239~~115
~~Securities Authorized for Issuance Under Equity Compensation Plans~~		~~239~~
~~Ownership of Equity Securities~~	~~239~~
Item 13. Certain Relationships and Related Transactions, and Director Independence.	~~241~~115
~~Independence and Related Person Transactions~~		~~241~~
Item 14. Principal ~~Accounting~~Accountant Fees and Services.	~~243~~115
PART IV		~~244~~116
Item 15. Exhibits, Financial Statement Schedules.		~~244~~116
Item 16. Form 10-K Summary.		~~249~~121
Signatures		~~250~~122
Valuation and Qualifying Accounts		S-~~S-1~~1



	Majority Owned and Licensed Trademarks
United States		Kraft, Oscar Mayer, Heinz, Velveeta, Philadelphia, Lunchables, ~~Velveeta, Planters, Maxwell House,~~ Capri Sun*, Ore-Ida, Maxwell House, Kool-Aid, Jell-O
~~Canada~~International		Kraft, Cracker Barrel, Heinz, Philadelphia, Maxwell House, Classico, McCafe, P’Tit Quebec, Tassimo
~~EMEA~~	~~Heinz, Plasmon, Pudliszki, Honig, HP, Kraft, Benedicta, Karvan Cevitam~~
~~Rest of World~~	Heinz, ABC, Master, ~~Quero,~~ Kraft, Golden Circle, ~~Wattie's, Glucon-D, Complan~~Quero, Plasmon, Wattie’s, Pudliszki
Canada		Kraft, Philadelphia, Heinz, Classico, Maxwell House



	Kraft Heinz		S&P 500		S&P Consumer Staples Food and Soft Drink Products
July 6, 2015	$	100.00	$	100.00	$	100.00
December 31, 2015	102.07		99.85		110.18
December 30, 2016	125.99		111.79		114.98
December 29, 2017	115.44		136.20		128.53
December 28, 2018	67.49		129.11		121.93


	Kraft Heinz		S&P 500		S&P Consumer Staples Food and Soft Drink Products
December 30, 2016	$	100.00	$	100.00	$	100.00
December 29, 2017	91.60		121.83		111.74
December 28, 2018	53.54		115.49		106.04
December 27, 2019	41.08		153.57		137.25
December 24, 2020	48.08		178.76		143.96
December 23, 2021	50.53		231.39		163.58



x☒						ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, $0.01 par value	KHC	The Nasdaq Stock Market LLC



	For the Nine Months Ended			For the Year Ended
	September 29, 2018			December 30, 2017			December 31, 2016
	(in millions, except per share data)
Net income	$	(2	)	$	(58	)	$	(36	)
Adjusted EBITDA^(a)	(35		)	(106		)	(79		)
Diluted earnings per common share	—			(0.04		)	(0.03		)
Adjusted EPS^(a)	(0.01		)	(0.05		)	(0.02		)


~~(a)~~	~~Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. See the~~ ~~Non-GAAP Financial Measures~~ ~~section within Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the related definitions and reconciliations.~~



	Total Number of Shares Purchased^(a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs^(b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
9/30/2018 - 11/3/2018	48,358	$	55.58	—	$	—
11/4/2018 - 12/1/2018	79,925	52.18		—	—
12/2/2018 - 12/29/2018	231,409	49.16		—	—
Total	359,692			—


	Total Number of Shares Purchased(a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
9/26/2021 — 10/30/2021	1,888,532	$	36.85	—	$	—
10/31/2021 — 11/27/2021	1,421,051	36.97		—	—
11/28/2021 — 12/25/2021	53,208	34.56		—	—
Total	3,362,791			—


^(b)	~~We do not have any publicly announced share repurchase plans or programs.~~



				As Restated
								(Unaudited)
	December 29, 2018 (52 weeks)			December 30, 2017 (52 weeks)		December 31, 2016 (52 weeks)^(h)		January 3, 2016 (53 weeks)			December 28, 2014 (52 weeks)
	(in millions, except per share data)
Period Ended:
Net sales^(a)(b)(c)	$	26,268		$	26,076	$	26,300	$	18,318		$	10,922
Income/(loss)^(c)(d)(e)	(10,254		)	10,932		3,606		614			672
Income/(loss) attributable to common shareholders^(c)(d)(e)	(10,192		)	10,941		3,416		(299		)	(63		)
Income/(loss) per common share:
Basic^(c)(d)(e)	(8.36		)	8.98		2.81		(0.38		)	(0.17		)
Diluted^(c)(d)(e)	(8.36		)	8.91		2.78		(0.38		)	(0.17		)

				As Restated
						(Unaudited)
	December 29, 2018			December 30, 2017		December 31, 2016		January 3, 2016			December 28, 2014
	(in millions, except per share data)
As of:
Total assets^(b)(c)(e)	103,461			120,092		120,617		123,110			36,571
Long-term debt^(b)(c)(f)	30,770			28,308		29,712		25,148			13,358
Redeemable preferred stock^(g)	—			—		—		8,320			8,320
Cash dividends per common share	2.50			2.45		2.35		1.70			—


~~(b)~~	The increases in net sales in 2016 and in 2015 compared to the prior year, and the increases in total assets and long-term debt from December 28, 2014 to January 3, 2016, were primarily driven by the 2015 Merger.


~~(d)~~	The increases in income/(loss), income/(loss) attributable to common shareholders, and basic and diluted income/(loss) per common share in 2017 compared to 2016 were primarily driven by U.S. Tax Reform, which was enacted in December 2017. See Note 11, ~~Income Taxes, in Item 8,~~ ~~Financial Statements and Supplementary Data, for additional information.~~


~~(f)~~	~~Amounts exclude the current portion of long-term debt.~~


				As Restated & Recast				As Restated & Recast
	December 29, 2018			December 30, 2017		% Change		December 30, 2017		December 31, 2016		% Change			December 25, 2021		December 26, 2020		% Change
	(in millions, except per share data)							(in millions, except per share data)							(in millions, except per share data)
Net sales	$	26,268		$	26,076	0.7	%	$	26,076	$	26,300	(0.9	)%	Net sales	$	26,042	$	26,185	(0.5)	%
Operating income/(loss)	(10,220		)	6,057		(268.7	)%	6,057		5,601		8.1	%	Operating income/(loss)	3,460		2,128		62.6	%
Net income/(loss)														Net income/(loss)	1,024		361		183.7	%
Net income/(loss) attributable to common shareholders	(10,192		)	10,941		(193.2	)%	10,941		3,416		220.3	%	Net income/(loss) attributable to common shareholders	1,012		356		184.5	%
Diluted EPS	(8.36		)	8.91		(193.8	)%	8.91		2.78		220.5	%	Diluted EPS	0.82		0.29		182.8	%


~~(a)~~	~~Organic Net Sales is a non-GAAP financial measure. See the~~ ~~Non-GAAP Financial Measures~~ ~~section within this item.~~


~~(a)~~	~~Adjusted EBITDA is a non-GAAP financial measure. See the~~ ~~Non-GAAP Financial Measures~~ ~~section within this item.~~


	December 25, 2021		December 26, 2020		$ Change		% Change
Diluted EPS	$	0.82	$	0.29	$	0.53	182.8	%
Restructuring activities	0.05		—		0.05

Unrealized losses/(gains) on commodity hedges	0.01		—		0.01
Impairment losses	1.07		2.59		(1.52)
Certain non-ordinary course legal and regulatory matters	0.05		—		0.05
Losses/(gains) on sale of business(a)	0.15		(0.01)		0.16

Debt prepayment and extinguishment costs	0.59		0.08		0.51
Certain significant discrete income tax items	0.19		(0.07)		0.26
Adjusted EPS(b)	$	2.93	$	2.88	$	0.05	1.7	%

Key drivers of change in Adjusted EPS(b):
Results of operations					$	(0.08)
Results of divested operations					(0.10)
Interest expense					0.09
Other expense/(income)					(0.02)
Effective tax rate					0.18
Effect of dilutive equity awards(c)					(0.02)
					$	0.05


~~(a)~~	~~Adjusted EPS is a non-GAAP financial measure. See the~~ ~~Non-GAAP Financial Measures~~ ~~section within this item.~~


	2021 Compared to 2020
	December 25, 2021		December 26, 2020
	(in millions)
Organic Net Sales(a):
United States	$	16,667	$	16,403
International	5,463		5,299
Canada	1,584		1,591
Total Organic Net Sales	$	23,714	$	23,293



	2018 Compared to 2017				2017 Compared to 2016
			As Restated
	December 29, 2018		December 30, 2017		December 30, 2017		December 31, 2016
	(in millions)
Organic Net Sales^(a):
United States	$	18,122	$	18,230	$	18,230	$	18,469
Canada	2,178		2,177		2,135		2,302
EMEA	2,633		2,529		2,549		2,529
Rest of World	3,172		2,940		3,049		2,888
Total Organic Net Sales	$	26,105	$	25,876	$	25,963	$	26,188



	Net Sales		Currency	Acquisitions and Divestitures	Organic Net Sales		Price	Volume/Mix
2018 Compared to 2017
United States	(0.6	)%	0.0 pp	0.0 pp	(0.6	)%	(0.9) pp	0.3 pp
Canada	(0.2	)%	(0.3) pp	0.0 pp	0.1	%	(0.6) pp	0.7 pp
EMEA	5.1	%	2.5 pp	(1.5) pp	4.1	%	0.9 pp	3.2 pp
Rest of World	5.6	%	(7.6) pp	5.3 pp	7.9	%	5.4 pp	2.5 pp
Kraft Heinz	0.7	%	(0.6) pp	0.4 pp	0.9	%	0.0 pp	0.9 pp

2017 Compared to 2016 (As Restated)
United States	(1.3	)%	0.0 pp	0.0 pp	(1.3	)%	0.5 pp	(1.8) pp
Canada	(5.4	)%	1.9 pp	0.0 pp	(7.3	)%	(1.8) pp	(5.5) pp
EMEA	—	%	(0.5) pp	(0.3) pp	0.8	%	(0.5) pp	1.3 pp
Rest of World	4.8	%	(0.8) pp	0.0 pp	5.6	%	4.2 pp	1.4 pp
Kraft Heinz	(0.9	)%	0.0 pp	0.0 pp	(0.9	)%	0.6 pp	(1.5) pp


	Material Cash Requirements
	2022		2023-2024		2025-2026		2027 and Thereafter		Total
Long-term debt(a)	$	1,640	$	3,305	$	3,644	$	28,645	$	37,234
Finance leases(b)	46		56		34		169		305
Operating leases(c)	155		214		150		229		748
Purchase obligations(d)	541		772		401		282		1,996
Other long-term liabilities(e)	39		125		98		167		429
Total	$	2,421	$	4,472	$	4,327	$	29,492	$	40,712


	December 25, 2021
ASSETS
Current assets	$	6,484
Current assets due from affiliates(a)	2,890
Non-current assets	5,709
Goodwill	8,860
Intangible assets, net	2,222
Non-current assets due from affiliates(b)	207
LIABILITIES
Current liabilities	$	5,091
Current liabilities due to affiliates(a)	5,922
Non-current liabilities	23,120
Non-current liabilities due to affiliates(b)	600


	Goodwill Carrying Value (in billions)		Discount Rate				Long-Term Growth Rate				Royalty Rate					Goodwill or Brand Carrying Amount (in billions)			Discount Rate								Long-Term Growth Rate								Royalty Rate
			Minimum		Maximum		Minimum		Maximum		Minimum		Maximum				Minimum				Maximum				Minimum				Maximum				Minimum				Maximum
Reporting units	$	29.0	7.0	%	10.7	%	1.5	%	4.7	%					Reporting units		$	28.3			6.5	%			7.0	%			1.0	%			1.5	%
Brands (excess earnings method)	24.4		7.5	%	7.5	%	0.8	%	2.1	%					Brands (excess earnings method)	15.0			7.0	%			7.2	%			0.8	%			1.5	%
Brands (relief from royalty method)	4.9		7.5	%	10.2	%	0.5	%	4.0	%	1.0	%	20.0	%	Brands (relief from royalty method)	6.2			7.0	%			7.5	%			0.5	%			2.0	%			5.0	%		20.0	%


~~(a)~~	A reduction in fair value would not necessarily cause an impairment in all cases, but due to the low or zero excess fair value over carrying amount for these reporting units and brands, it is reasonably possible that a reduction in fair value would lead to an impairment.



	One-Percentage-Point
	Increase		(Decrease)
Effect on annual service and interest cost	$	3	$	(3	)
Effect on postretirement benefit obligation	48		(41		)


	U.S. Plans						Non-U.S. Plans							U.S. Plans				Non-U.S. Plans
	100-Basis-Point						100-Basis-Point							100-Basis-Point				100-Basis-Point
	Increase			Decrease			Increase			Decrease				Increase		Decrease		Increase		Decrease
Effect of change in discount rate on pension costs	$	11		$	(17	)	$	(2	)	$	(7	)	Effect of change in discount rate on pension costs	$	9	$	(25)	$	10	$	(2)
Effect of change in expected rate of return on plan assets on pension costs	(41		)	41			(27		)	27			Effect of change in expected rate of return on plan assets on pension costs	(43)		43		(29)		29
Effect of change in discount rate on postretirement costs	(8		)	1			—			(1		)	Effect of change in discount rate on postretirement costs	1		(1)		(1)		1
Effect of change in expected rate of return on plan assets on postretirement costs	(10		)	10			—			—			Effect of change in expected rate of return on plan assets on postretirement costs	(11)		11		—		—



	Payments Due
	2019	2020-2021	2022-2023	2024 and Thereafter	Total
Long-term debt^(a)	1,641	6,369	8,046	32,195	48,251
Capital leases^(b)(f)	27	98	27	85	237
Operating leases^(c)(f)	185	242	119	148	694
Purchase obligations^(d)(f)	1,569	1,162	497	217	3,445
Other long-term liabilities^(e)	41	83	98	203	425
Total	3,463	7,954	8,787	32,848	53,052


~~(a)~~	Amounts represent the expected cash payments of our long-term debt, including interest on variable and fixed rate long-term debt. Interest on variable rate long-term debt is calculated based on interest rates at December 29, 2018.


~~(b)~~	~~Amounts represent the expected cash payments of our capital leases, including expected cash payments of interest expense.~~


~~(c)~~	~~Operating leases represent the minimum rental commitments under non-cancelable operating leases.~~

~~Calculated Net Bonus~~

~~Swap Election %~~

~~# of Investment Shares~~

~~Nasdaq Closing Price~~

~~# of Investment Shares~~