Supplemental Financial Information | Supplemental Financial Information We fully and unconditionally guarantee the notes issued by our wholly owned operating subsidiary, Kraft Heinz Foods Company. See Note 12, Debt, to our consolidated financial statements for the year ended January 3, 2016 in our Annual Report on Form 10-K 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), Kraft Heinz Foods Company (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 SEC 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 Three Months Ended October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,206 $ 2,233 $ (172 ) $ 6,267 Cost of products sold — 2,700 1,521 (172 ) 4,049 Gross profit — 1,506 712 — 2,218 Selling, general and administrative expenses — 194 611 — 805 Intercompany service fees and other recharges — 795 (795 ) — — Operating income — 517 896 — 1,413 Interest expense — 294 17 — 311 Other expense/(income), net — (20 ) 17 — (3 ) Income/(loss) before income taxes — 243 862 — 1,105 Provision for/(benefit from) income taxes — (199 ) 461 — 262 Equity in earnings of subsidiaries 842 400 — (1,242 ) — Net income/(loss) 842 842 401 (1,242 ) 843 Net income/(loss) attributable to noncontrolling interest — — 1 — 1 Net income/(loss) excluding noncontrolling interest $ 842 $ 842 $ 400 $ (1,242 ) $ 842 Comprehensive income/(loss) excluding noncontrolling interest $ 547 $ 547 $ 285 $ (832 ) $ 547 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 3,963 $ 2,285 $ (128 ) $ 6,120 Cost of products sold — 2,887 1,733 (128 ) 4,492 Gross profit — 1,076 552 — 1,628 Selling, general and administrative expenses — 684 545 — 1,229 Intercompany service fees and other recharges — 626 (626 ) — — Operating income — (234 ) 633 — 399 Interest expense — 447 13 — 460 Other expense/(income), net — (8 ) 116 — 108 Income/(loss) before income taxes — (673 ) 504 — (169 ) Provision for/(benefit from) income taxes — (462 ) 413 — (49 ) Equity in earnings of subsidiaries (123 ) 88 — 35 — Net income/(loss) (123 ) (123 ) 91 35 (120 ) Net income/(loss) attributable to noncontrolling interest — — 3 — 3 Net income/(loss) excluding noncontrolling interest $ (123 ) $ (123 ) $ 88 $ 35 $ (123 ) Comprehensive income/(loss) excluding noncontrolling interest $ (17 ) $ (17 ) $ (727 ) $ 744 $ (17 ) The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 13,156 $ 6,948 $ (474 ) $ 19,630 Cost of products sold — 8,273 4,704 (474 ) 12,503 Gross profit — 4,883 2,244 — 7,127 Selling, general and administrative expenses — 778 1,787 — 2,565 Intercompany service fees and other recharges — 3,320 (3,320 ) — — Operating income — 785 3,777 — 4,562 Interest expense — 782 42 — 824 Other expense/(income), net — 66 (71 ) — (5 ) Income/(loss) before income taxes — (63 ) 3,806 — 3,743 Provision for/(benefit from) income taxes — (349 ) 1,394 — 1,045 Equity in earnings of subsidiaries 2,688 2,402 — (5,090 ) — Net income/(loss) 2,688 2,688 2,412 (5,090 ) 2,698 Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ 2,688 $ 2,688 $ 2,402 $ (5,090 ) $ 2,688 Comprehensive income/(loss) excluding noncontrolling interest $ 2,131 $ 2,131 $ 2,013 $ (4,144 ) $ 2,131 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 5,820 $ 5,638 $ (244 ) $ 11,214 Cost of products sold — 4,157 3,944 (244 ) 7,857 Gross profit — 1,663 1,694 — 3,357 Selling, general and administrative expenses — 986 1,019 — 2,005 Intercompany service fees and other recharges — 619 (619 ) — — Operating income — 58 1,294 — 1,352 Interest expense — 973 82 — 1,055 Other expense/(income), net — 121 193 — 314 Income/(loss) before income taxes — (1,036 ) 1,019 — (17 ) Provision for/(benefit from) income taxes — (573 ) 557 — (16 ) Equity in earnings of subsidiaries (11 ) 452 — (441 ) — Net income/(loss) (11 ) (11 ) 462 (441 ) (1 ) Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ (11 ) $ (11 ) $ 452 $ (441 ) $ (11 ) Comprehensive income/(loss) excluding noncontrolling interest $ (50 ) $ (50 ) $ (922 ) $ 972 $ (50 ) The Kraft Heinz Company Condensed Consolidating Balance Sheets As of October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,131 $ 1,789 $ — $ 3,920 Trade receivables — — 855 — 855 Receivables due from affiliates — 873 101 (974 ) — Dividends due from affiliates 769 — — (769 ) — Sold receivables — — 208 — 208 Inventories — 2,061 1,047 — 3,108 Short-term lending due from affiliates — 1,790 3,027 (4,817 ) — Other current assets — 2,037 423 (1,608 ) 852 Total current assets 769 8,892 7,450 (8,168 ) 8,943 Property, plant and equipment, net — 4,236 2,254 — 6,490 Goodwill — 11,093 33,425 — 44,518 Investments in subsidiaries 57,642 72,963 — (130,605 ) — Intangible assets, net — 3,400 56,220 — 59,620 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 548 961 — 1,509 TOTAL ASSETS $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 639 $ 14 $ — $ 653 Current portion of long-term debt — 2,028 19 — 2,047 Short-term lending due to affiliates — 3,027 1,790 (4,817 ) — Trade payables — 1,982 1,474 — 3,456 Payables due to affiliates — 101 873 (974 ) — Accrued marketing — 220 488 — 708 Accrued postemployment costs — 150 14 — 164 Income taxes payable — 576 1,174 (1,608 ) 142 Interest payable — 300 11 — 311 Dividends payable 769 — — — 769 Dividends due to affiliates — 769 — (769 ) — Other current liabilities — 873 291 — 1,164 Total current liabilities 769 10,665 6,148 (8,168 ) 9,414 Long-term debt — 28,970 1,010 — 29,980 Long-term borrowings due to affiliates — 2,000 1,917 (3,917 ) — Deferred income taxes — 1,104 19,602 — 20,706 Accrued postemployment costs — 2,100 267 — 2,367 Other liabilities — 351 394 — 745 TOTAL LIABILITIES 769 45,190 29,338 (12,085 ) 63,212 Redeemable noncontrolling interest — — — — — Total shareholders’ equity 57,642 57,642 72,746 (130,388 ) 57,642 Noncontrolling interest — — 226 — 226 TOTAL EQUITY 57,642 57,642 72,972 (130,388 ) 57,868 TOTAL LIABILITIES AND EQUITY $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of January 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 3,189 $ 1,648 $ — $ 4,837 Trade receivables — 62 809 — 871 Receivables due from affiliates — 555 319 (874 ) — Sold receivables — 554 29 583 Inventories — 1,741 877 — 2,618 Short-term lending due from affiliates — 3,657 4,353 (8,010 ) — Other current assets — 645 443 (217 ) 871 Total current assets — 10,403 8,478 (9,101 ) 9,780 Property, plant and equipment, net — 4,518 2,006 — 6,524 Goodwill — 10,976 32,075 — 43,051 Investments in subsidiaries 66,005 73,105 — (139,110 ) — Intangible assets, net — 3,838 58,282 — 62,120 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 534 964 — 1,498 TOTAL ASSETS $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ — $ 4 $ — $ 4 Current portion of long-term debt — 65 14 — 79 Short-term lending due to affiliates — 4,353 3,657 (8,010 ) — Trade payables — 1,612 1,232 — 2,844 Payables due to affiliates — 319 555 (874 ) — Accrued marketing — 359 497 — 856 Accrued postemployment costs — 316 12 — 328 Income taxes payable — 71 563 (217 ) 417 Interest payable — 386 15 — 401 Dividends payable — 762 — — 762 Other current liabilities — 988 253 — 1,241 Total current liabilities — 9,231 6,802 (9,101 ) 6,932 Long-term debt — 24,143 1,008 — 25,151 Long-term borrowings due to affiliates — 2,000 1,905 (3,905 ) — Deferred income taxes — 1,278 20,219 — 21,497 Accrued postemployment costs — 2,147 258 — 2,405 Other liabilities — 270 482 — 752 TOTAL LIABILITIES — 39,069 30,674 (13,006 ) 56,737 Redeemable noncontrolling interest — — 23 — 23 9.00% cumulative compounding preferred stock, Series A 8,320 — — — 8,320 Total shareholders’ equity 57,685 66,005 72,900 (138,905 ) 57,685 Noncontrolling interest — — 208 — 208 TOTAL EQUITY 57,685 66,005 73,108 (138,905 ) 57,893 TOTAL LIABILITIES AND EQUITY $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Nine Months Ended October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 1,636 $ 1,821 $ 1,045 $ (1,636 ) $ 2,866 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (605 ) (231 ) — (836 ) Proceeds from net investment hedges — 84 — — 84 Net proceeds from/(payments on) intercompany lending activities — 565 (74 ) (491 ) — Additional investments in subsidiaries — (10 ) — 10 — Return of capital 8,987 — — (8,987 ) — Other investing activities, net — 41 (31 ) — 10 Net cash provided by/(used for) investing activities 8,987 75 (336 ) (9,468 ) (742 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (69 ) (5 ) — (74 ) Proceeds from issuance of long-term debt — 6,978 3 — 6,981 Proceeds from issuance of commercial paper — 4,296 — — 4,296 Repayments of commercial paper — (3,660 ) — — (3,660 ) Net proceeds from/(payments on) intercompany borrowing activities — 74 (565 ) 491 — Dividends paid-Series A Preferred Stock (180 ) — — — (180 ) Dividends paid-common stock (2,123 ) (2,303 ) — 2,303 (2,123 ) Redemption of Series A Preferred Stock (8,320 ) — — — (8,320 ) Other intercompany capital stock transactions — (8,320 ) 10 8,310 — Other financing activities, net — 50 6 — 56 Net cash provided by/(used for) financing activities (10,623 ) (2,954 ) (551 ) 11,104 (3,024 ) Effect of exchange rate changes on cash and cash equivalents — — (17 ) — (17 ) Cash and cash equivalents: Net increase/(decrease) — (1,058 ) 141 — (917 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,131 $ 1,789 $ — $ 3,920 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 180 $ (88 ) $ 834 $ (180 ) $ 746 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (181 ) (185 ) — (366 ) Proceeds from net investment hedges — 481 — — 481 Net proceeds from/(payments on) intercompany lending activities — 721 (346 ) (375 ) — Payments to acquire Kraft Foods Group, Inc., net of cash acquired — (9,535 ) 67 — (9,468 ) Additional investments in subsidiaries (10,000 ) — — 10,000 — Return of capital 997 5 — (1,002 ) — Other investing activities, net — (34 ) (14 ) — (48 ) Net cash provided by/(used for) investing activities (9,003 ) (8,543 ) (478 ) 8,623 (9,401 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (12,282 ) (26 ) — (12,308 ) Proceeds from issuance of long-term debt — 14,033 790 — 14,823 Net proceeds from/(payments on) intercompany borrowing activities — 346 (721 ) 375 — Proceeds from issuance of common stock 10,000 10,000 — (10,000 ) 10,000 Dividends paid-Series A Preferred Stock (540 ) — — — (540 ) Dividends paid-common stock (637 ) (1,177 ) — 1,177 (637 ) Other intercompany capital stock transactions — — (5 ) 5 — Other financing activities, net — (95 ) (52 ) — (147 ) Net cash provided by/(used for) financing activities 8,823 10,825 (14 ) (8,443 ) 11,191 Effect of exchange rate changes on cash and cash equivalents — — (397 ) — (397 ) Cash and cash equivalents: Net increase/(decrease) — 2,194 (55 ) — 2,139 Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 2,735 $ 1,702 $ — $ 4,437 |