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 11, 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), 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 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 31, 2016 (52 weeks) (in millions) 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 — 970 2,474 — 3,444 Intercompany service fees and other recharges — 4,624 (4,624 ) — — Operating income — 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 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 Statements of Income For the Year Ended January 3, 2016 (53 weeks) (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 10,580 $ 8,145 $ (387 ) $ 18,338 Cost of products sold — 7,298 5,666 (387 ) 12,577 Gross profit — 3,282 2,479 — 5,761 Selling, general and administrative expenses — 1,449 1,673 — 3,122 Intercompany service fees and other recharges — 929 (929 ) — — Operating income — 904 1,735 — 2,639 Interest expense — 1,221 100 — 1,321 Other expense/(income), net — 140 165 — 305 Income/(loss) before income taxes — (457 ) 1,470 — 1,013 Provision for/(benefit from) income taxes — (192 ) 558 — 366 Equity in earnings of subsidiaries 634 899 — (1,533 ) — Net income/(loss) 634 634 912 (1,533 ) 647 Net income/(loss) attributable to noncontrolling interest — — 13 — 13 Net income/(loss) excluding noncontrolling interest $ 634 $ 634 $ 899 $ (1,533 ) $ 634 Comprehensive income/(loss) excluding noncontrolling interest $ 537 $ 537 $ (734 ) $ 197 $ 537 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Year Ended December 28, 2014 (52 weeks) (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 3,740 $ 7,325 $ (143 ) $ 10,922 Cost of products sold — 2,663 5,125 (143 ) 7,645 Gross profit — 1,077 2,200 — 3,277 Selling, general and administrative expenses — 633 1,076 — 1,709 Intercompany service fees and other recharges — (23 ) 23 — — Operating income — 467 1,101 — 1,568 Interest expense — 556 130 — 686 Other expense/(income), net — 104 (25 ) — 79 Income/(loss) before income taxes — (193 ) 996 — 803 Provision for/(benefit from) income taxes — (156 ) 287 — 131 Equity in earnings of subsidiaries 657 694 — (1,351 ) — Net income/(loss) 657 657 709 (1,351 ) 672 Net income/(loss) attributable to noncontrolling interest — — 15 — 15 Net income/(loss) excluding noncontrolling interest $ 657 $ 657 $ 694 $ (1,351 ) $ 657 Comprehensive income/(loss) excluding noncontrolling interest $ (149 ) $ (149 ) $ (180 ) $ 329 $ (149 ) The Kraft Heinz Company Condensed Consolidating Balance Sheets As of December 31, 2016 (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,830 $ 1,374 $ — $ 4,204 Trade receivables — 12 757 — 769 Receivables due from affiliates — 712 111 (823 ) — Dividends due from affiliates 39 — — (39 ) — Sold receivables — — 129 — 129 Inventories — 1,759 925 — 2,684 Short-term lending due from affiliates — 1,722 2,956 (4,678 ) — Other current assets — 2,229 447 (1,709 ) 967 Total current assets 39 9,264 6,699 (7,249 ) 8,753 Property, plant and equipment, net — 4,447 2,241 — 6,688 Goodwill — 11,067 33,058 — 44,125 Investments in subsidiaries 57,358 70,877 — (128,235 ) — Intangible assets, net — 3,364 55,933 — 59,297 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 501 1,116 — 1,617 TOTAL ASSETS $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 642 $ 3 $ — $ 645 Current portion of long-term debt — 2,032 14 — 2,046 Short-term lending due to affiliates — 2,956 1,722 (4,678 ) — Trade payables — 2,376 1,620 — 3,996 Payables due to affiliates — 111 712 (823 ) — Accrued marketing — 277 472 — 749 Accrued postemployment costs — 144 13 — 157 Income taxes payable — — 1,964 (1,709 ) 255 Interest payable — 401 14 — 415 Dividends payable 39 — — — 39 Dividends due to affiliates — 39 — (39 ) — Other current liabilities — 588 611 — 1,199 Total current liabilities 39 9,566 7,145 (7,249 ) 9,501 Long-term debt — 28,736 977 — 29,713 Long-term borrowings due to affiliates — 2,000 1,902 (3,902 ) — Deferred income taxes — 1,382 19,466 — 20,848 Accrued postemployment costs — 1,754 284 — 2,038 Other liabilities — 424 382 — 806 TOTAL LIABILITIES 39 43,862 30,156 (11,151 ) 62,906 Redeemable noncontrolling interest — — — — — Total shareholders’ equity 57,358 57,358 70,675 (128,033 ) 57,358 Noncontrolling interest — — 216 — 216 TOTAL EQUITY 57,358 57,358 70,891 (128,033 ) 57,574 TOTAL LIABILITIES AND EQUITY $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of January 3, 2016 (in millions) 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 Year Ended December 31, 2016 (52 weeks) (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 3,097 $ 4,369 $ 884 $ (3,112 ) $ 5,238 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (923 ) (324 ) — (1,247 ) Proceeds from net investment hedges — 104 (13 ) — 91 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 — 49 (6 ) — 43 Net cash provided by/(used for) investing activities 9,042 (90 ) (306 ) (9,759 ) (1,113 ) 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 Debt issuance costs — (53 ) — — (53 ) 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 (55 ) 47 (8 ) — (16 ) Net cash provided by/(used for) financing activities (12,139 ) (4,638 ) (715 ) 12,871 (4,621 ) Effect of exchange rate changes on cash and cash equivalents — — (137 ) — (137 ) Cash and cash equivalents: Net increase/(decrease) — (359 ) (274 ) — (633 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,830 $ 1,374 $ — $ 4,204 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Year Ended January 3, 2016 (53 weeks) (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 632 $ 1,227 $ 1,395 $ (787 ) $ 2,467 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (400 ) (248 ) — (648 ) Proceeds from net investment hedges — 488 — — 488 Net proceeds from/(payments on) intercompany lending activities — 737 (721 ) (16 ) — 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 1,570 5 — (1,575 ) — Other investing activities, net — (66 ) (10 ) — (76 ) Net cash provided by/(used for) investing activities (8,430 ) (8,771 ) (912 ) 8,409 (9,704 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (12,284 ) (30 ) — (12,314 ) Proceeds from issuance of long-term debt — 14,032 802 — 14,834 Debt issuance costs — (94 ) (4 ) — (98 ) Net proceeds from/(payments on) intercompany borrowing activities — 721 (737 ) 16 — Proceeds from issuance of common stock to Sponsors 10,000 — — — 10,000 Dividends paid-Series A Preferred Stock (900 ) — — — (900 ) Dividends paid-common stock (1,302 ) (2,202 ) (155 ) 2,357 (1,302 ) Other intercompany capital stock transactions — 10,000 (5 ) (9,995 ) — Other financing activities, net — 19 (56 ) — (37 ) Net cash provided by/(used for) financing activities 7,798 10,192 (185 ) (7,622 ) 10,183 Effect of exchange rate changes on cash and cash equivalents — — (407 ) — (407 ) Cash and cash equivalents: Net increase/(decrease) — 2,648 (109 ) — 2,539 Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 3,189 $ 1,648 $ — $ 4,837 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Year Ended December 28, 2014 (52 weeks) (in millions) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 578 $ 669 $ 1,556 $ (663 ) $ 2,140 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (211 ) (188 ) — (399 ) Net proceeds from/(payments on) intercompany lending activities — (802 ) (2,479 ) 3,281 — Return of capital 142 — — (142 ) — Other investing activities, net — 23 27 — 50 Net cash provided by/(used for) investing activities 142 (990 ) (2,640 ) 3,139 (349 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (1,096 ) (7 ) — (1,103 ) Net proceeds from/(payments on) intercompany borrowing activities — 2,479 802 (3,281 ) — Dividends paid-Series A Preferred Stock (720 ) — — — (720 ) Dividends paid-common stock — (720 ) (85 ) 805 — Other financing activities, net — 12 (9 ) — 3 Net cash provided by/(used for) financing activities (720 ) 675 701 (2,476 ) (1,820 ) Effect of exchange rate changes on cash and cash equivalents — — (132 ) — (132 ) Cash and cash equivalents: Net increase/(decrease) — 354 (515 ) — (161 ) Balance at beginning of period — 187 2,272 — 2,459 Balance at end of period $ — $ 541 $ 1,757 $ — $ 2,298 |