Kraft Heinz (KHC) 10-K risk factor changes: FY2018 vs FY2017

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 [added: changing] consumer preferences.

We may need to reduce our prices in response to competitive and customer [removed: pressures.][added: pressures, including pressures in relation to private label products that are generally sold at lower prices.]

These pressures [added: have restricted and] may [removed: also] [added: in the future continue to] restrict our ability to increase prices in response to commodity and other cost increases.

Failure to effectively assess, timely change and set proper [removed: pricing] [added: pricing, promotions,] or trade incentives may negatively impact the achievement of our objectives.

We may also need to increase or reallocate spending on marketing, retail trade incentives, materials, advertising, and new product [added: or channel] innovation to maintain or increase market share.

If we are unable to compete effectively, our profitability, financial condition, and operating results may [removed: suffer.][added: decline.]

Consolidation also produces larger retail customers that may seek to leverage their [removed: position] [added: positions] to improve their profitability by demanding improved efficiency, lower pricing, more favorable terms, increased promotional programs, or [removed: specifically tailored] [added: specifically-tailored] product offerings.

In addition, larger retailers have [removed: the] scale to develop supply chains that permit them to operate with reduced inventories or to develop and market their own [removed: retailer brands.][added: private label products.]

[removed: Existing] [added: 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.

Moreover, adverse publicity about legal or regulatory action against us, our quality and safety, our environmental or social impacts, [added: 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’ confidence, and reduce demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.

In addition, we might fail to [added: appropriately target our marketing efforts,] anticipate consumer preferences, [added: or] invest sufficiently in maintaining, extending, and expanding our brand image.

[removed: We are a global company with sales in approximately 190 countries and territories; approximately 30%] [added: Approximately 31%] of our [removed: 2017] [added: 2018] net sales were generated outside of the United States.

| • | 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 [removed: interpretation,] [added: interpretations,] or tax audit implications; |

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

| • | compliance with antitrust and competition laws, data privacy laws, and a variety of other local, [removed: national] [added: national,] and multi-national regulations and laws in multiple jurisdictions; |

| • | changes in capital controls, including currency exchange controls, government currency [removed: policies] [added: 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; |

| • | risks and costs associated with political and economic instability, corruption, anti-American [removed: sentiment] [added: 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, [removed: application] [added: 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 [added: made] and positions [removed: that we take] [added: taken] to hedge such volatility; |

| • | design, [removed: implementation] [added: implementation,] and use of effective control environment processes across our diverse operations and employee base. |

In addition, political and economic changes or volatility, geopolitical [removed: regional] conflicts, terrorist activity, political unrest, civil strife, acts of war, public corruption, [removed: expropriation] [added: expropriation,] and other economic or political uncertainties could interrupt and negatively affect our business operations or customer demand.

We must leverage our brand value to compete against [removed: retailer brands and other economy brands.][added: private label products.]

In nearly all of our product categories, we compete with branded products as well as [removed: retailer and other economy brands,] [added: private label products,] which are typically sold at lower prices.

Consumers may not buy our products if relative differences in value and/or quality between our products and [removed: retailer or other economy brands] [added: private label products] change in favor of competitors’ products or if consumers perceive this type of change.

If consumers prefer [removed: retailer or other economy brands,] [added: private label products,] then we could lose market share or sales volumes or shift our product mix to lower margin offerings.

Our [removed: financial] 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 [removed: continually.][added: continually and rapidly.]

We must distinguish between short-term [removed: fads, mid-term trends,] [added: trends] and long-term changes in consumer preferences.

If we fail to expand our product offerings successfully across product categories, or if we do not rapidly develop products in [removed: faster growing] [added: 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 [added: (including as they relate to obesity or other health concerns)] could influence consumer preferences and acceptance of some of our products and marketing programs.

Successful innovation depends on our ability to correctly anticipate customer and consumer acceptance, to obtain, [removed: protect] [added: protect,] and maintain necessary intellectual property rights, and to avoid infringing upon the intellectual property rights of others.

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

Our future results will also depend on our ability to enhance our portfolio by adding innovative new products in [removed: faster growing] [added: faster-growing] and more profitable categories and our ability to increase market share in our existing product categories.

[removed: An impairment] [added: Additional impairments] of the carrying [removed: value] [added: amounts] of goodwill or other indefinite-lived intangible assets could negatively affect our [removed: consolidated operating results.][added: financial condition and results of operations.]

[removed: The first step of the goodwill impairment] [added: We] test [removed: compares the] reporting [removed: unit’s] [added: units for impairment by comparing the] estimated fair value [added: of each reporting unit] with its carrying [removed: value.][added: amount.]

We test [removed: indefinite-lived intangible assets] [added: brands] for impairment by comparing the [added: estimated] fair value of each [removed: intangible asset] [added: brand] with its carrying [removed: value.][added: amount.]

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, [removed: estimates] [added: estimates,] and market factors.

Estimating the fair value of individual reporting units and [removed: indefinite-lived intangible assets] [added: brands] requires us to make assumptions and estimates regarding our future plans, as well as [removed: industry] [added: industry, economic,] and [removed: economic] [added: regulatory] conditions.

If current expectations of future growth rates [added: and margins] are not [removed: met or] [added: met, if] market factors outside of our control, such as discount rates, [removed: change significantly,] [added: change, or if management’s expectations or plans otherwise change, including as a result of the development of our global five-year operating plan,] then one or more [added: of our] reporting units or [removed: intangible assets] [added: brands] might become impaired in the future.

We purchase and use large quantities of commodities, including dairy products, meat products, coffee beans, nuts, [added: tomatoes, potatoes,] soybean and vegetable oils, sugar and other sweeteners, corn products, [removed: tomatoes,] [added: wheat products,] cucumbers, [removed: potatoes,] onions, other fruits and vegetables, spices, [removed: flour,] and [removed: wheat] [added: flour] to manufacture our products.

Industry Risks

Our principal competitors in these categories are manufacturers, as well as retailers with their own branded and private label products.

In addition, terminations of relationships with other significant contractual counterparties, including licensors, could adversely affect our portfolio, product sales, financial condition, and operating results.

Business Risks

We plan to continue to conduct strategic initiatives in various markets.

We may also face difficulties divesting business operations with minimal impact to the retained businesses.

We are a global company with sales and operations in numerous countries within developed and emerging markets.

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.

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.

In addition, the Board elected Joao M.

Castro-Neves, a partner of 3G Capital, one of the Sponsors, effective June 12, 2019.

Financial Risks

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

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.

If this occurs, we would be in default under our indebtedness instruments and unable to access our Senior Credit Facility.

Our goodwill balance consists of 20 reporting units, and 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 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.

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.

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.

As detailed in Note 10, Goodwill and Intangible Assets, in Item 8, Financial Statements and Supplementary Data, we recorded impairment losses totaling $15.9 billion for the year ended December 29, 2018.

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 impairment testing dates.

Accordingly, these and other individual reporting units and brands that have 20% or less excess fair value over carrying amount as of their latest 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.

We test goodwill and indefinite-lived intangible assets for impairment at least annually in the second quarter or when a triggering event occurs.

We performed our annual impairment testing in the second quarter of 2017.

If the carrying value of a reporting unit’s net assets exceeds its fair value, the second step would be applied to measure the difference between the carrying value and implied fair value of goodwill.

If the carrying value of goodwill exceeds its implied fair value, the goodwill would be considered impaired and would be reduced to its implied fair value.

If the carrying value exceeds fair value, the intangible asset would be considered impaired and would be reduced to its fair value.

These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors.

As goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to an impairment risk if business operating results or macroeconomic conditions deteriorate.

Additionally, recently impaired intangible assets can also be more susceptible to future impairment as they are recorded on the balance sheet at their recently estimated fair values.

An impairment of the carrying value of goodwill or other indefinite-lived intangible assets could negatively affect our operating results or net worth.

We rely on our management team and other key personnel.

We plan to drive additional growth and profitability through international markets.

Compliance with changes in laws, regulations, and related interpretations could impact our business.

Although we have implemented policies and procedures designed to ensure compliance with existing laws and regulations, there can be no assurance that courts or regulators will agree with our interpretations or that our employees, contractors, or agents will not violate our policies and procedures.

Moreover, a failure to maintain effective control processes could lead to violations, unintentional or otherwise, of laws and regulations.

Legal claims or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations could subject us to civil and criminal penalties that could materially and adversely affect our product sales, reputation, financial condition, and operating results.

In addition, the costs and other effects of defending potential and pending litigation and administrative actions against us may be difficult to determine and could adversely affect our financial condition and operating results.

Changes in the values of these derivatives are currently recorded in net income, resulting in volatility in both gross profits and net income.

We may experience volatile earnings as a result of these accounting treatments.

Our level of indebtedness could adversely affect our business.

As of the closing of the 2015 Merger, registrable shares represented approximately 51% of our outstanding common stock on a fully diluted basis.

In November 2017, we restated our consolidated financial statements for the quarters ended April 1, 2017 and July 1, 2017 in order to correctly classify cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized) to cash provided by investing activities (from cash provided by operating activities) within our condensed consolidated statements of cash flows.

In connection with these restatements, management identified a material weakness in our internal control over financial reporting related to the misapplication of Accounting Standards Update 2016-15.

Specifically, we did not maintain effective controls over the adoption of new accounting standards, including communication with the appropriate individuals in coming to our conclusions on the application of new accounting standards.

As a result of this material weakness, our management concluded that we did not maintain effective internal control over financial reporting as of April 1, 2017 and July 1, 2017.

While we have remediated the material weakness and our management has determined that our disclosure controls and procedures were effective as of December 30, 2017, there can be no assurance that our controls will remain adequate.

The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including judgments used in decision-making, the nature and complexity of the transactions we undertake, assumptions about the likelihood of future events, the soundness of our systems, cost limitations, and other limitations.

If other material weaknesses or significant deficiencies in our internal control are discovered or occur in the future or we otherwise must restate our financial statements, it could materially and adversely affect our business and results of operations or financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the weaknesses or deficiencies, subject us to fines, penalties, investigations or judgments, harm our reputation, or otherwise cause a decline in investor confidence.

We have three reportable segments defined by geographic region: United States, Canada, and [removed: Europe.][added: EMEA.]

Our remaining businesses are combined and disclosed as “Rest of [removed: World”.][added: World.” Rest of World comprises two operating segments: Latin America and APAC.]

[removed: In] [added: Our segments reflect a change, effective in] the [removed: third] [added: first] quarter of [removed: 2017, we announced] our [removed: plans] [added: fiscal year 2018,] to reorganize [removed: certain of] our international businesses to better align our global geographies.

[removed: These plans include moving] [added: We moved] our Middle East and Africa businesses from the [added: historical] AMEA operating segment into the [added: historical Europe reportable segment, forming the new] EMEA [removed: operating] [added: reportable] segment.

The remaining [removed: AMEA] businesses [removed: will become] [added: from] the [added: AMEA operating segment became the] APAC operating segment.

See Note [removed: 19,] [added: 22,] Segment Reporting, [added: in Item 8, Financial Statements and Supplementary Data,] to the consolidated financial statements for our financial information by segment.

[removed: In] [added: At the end of] 2017, we [added: had] substantially completed our multi-year program announced following the 2015 Merger (the “Integration Program”), [removed: for] which [removed: we expect] [added: was designed] to [removed: incur cumulative pre-tax] [added: reduce] costs [removed: of approximately $2.1 billion.][added: and integrate and optimize our combined organization.]

Approximately 60% of [removed: these] [added: total Integration Program] costs [removed: will be] [added: were] cash expenditures.

As of December [removed: 30, 2017,] [added: 29, 2018,] we [removed: have] [added: had] incurred cumulative pre-tax costs of [removed: $2,055] [added: $2,146] million related to the Integration Program.

These costs primarily included severance and employee benefit costs (including cash and non-cash severance), costs to exit facilities (including non-cash costs such as accelerated depreciation), and other costs incurred as a direct result of integration [removed: activities related to the 2015 Merger.][added: activities.]

[removed: Total expenses related] [added: Related] to our restructuring activities, including the Integration Program, [removed: were $457] [added: we recognized expenses of $460] million in [removed: 2017, $1,012] [added: 2018, $434] million in [removed: 2016,] [added: 2017,] and [removed: $1,023 million] [added: $1.0 billion] in [removed: 2015.][added: 2016.]

Integration Program [removed: costs] [added: expenses] included in these totals were [removed: $339] [added: $92] million in [removed: 2017, $887 million] [added: 2018, $316 million,] in [removed: 2016,] [added: 2017,] and [removed: $829] [added: $887] million in [removed: 2015.][added: 2016.]

[removed: We anticipate cumulative capital expenditures] [added: As] of [added: December 29, 2018, we had incurred] approximately $1.4 billion [added: in capital expenditures] related to the Integration [removed: Program.][added: Program since its inception in 2015.]

See Note [removed: 3,] [added: 6,] Integration and Restructuring Expenses, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for additional information.

[removed: The] [added: U.S. Tax Reform] legislation [added: enacted by the federal government on December 22, 2017] significantly changed U.S. tax [removed: law] [added: laws] by, among other things, lowering the federal corporate tax rate from 35.0% to 21.0%, effective January 1, [removed: 2018, implementing a territorial tax system,] [added: 2018] and imposing a one-time toll charge on deemed repatriated earnings of foreign subsidiaries as of December 30, 2017.

While the corporate tax rate reduction [removed: is] [added: was] effective January 1, 2018, we accounted for this anticipated rate change in 2017, the period of enactment.

See Critical Accounting [removed: Policies] [added: Estimates] within this item and Note [added: 10, Goodwill and Intangible Assets, in Item] 8, [removed: Income Taxes,] [added: Financial Statements and Supplementary Data,] to the consolidated financial statements for additional information.

See [removed: Equity and Dividends within this item, along with] Note [removed: 16,] [added: 19,] Debt, and Note [removed: 17,] [added: 20,] Capital Stock, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for additional information.

For additional information and reconciliations from our consolidated financial statements see [removed: Supplemental Unaudited Pro Forma Condensed Combined Financial Information and] Non-GAAP Financial Measures.

| | December 30, 2017 [removed: (52 weeks)] | | | | December 31, 2016 [removed: (52 weeks)] | | | | [removed: %] [added: $] Change | | | [removed: December 31, 2016 (52 weeks)] | [removed: | | | January 3, 2016 (53 weeks) | | | |] % Change | |

| Net income/(loss) attributable to common shareholders | [removed: 10,999] [added: (10,192] | | [added: )] | | [removed: 3,452] [added: 10,941] | | | | [removed: 218.6] [added: (193.2] | [removed: %] [added: )%] | | [removed: 3,452] [added: 10,941] | | | | [removed: (266] [added: 3,416] | | [removed: )] | | [removed: nm] [added: 220.3] | [added: %] |

| [removed: (b)] [added: (a)] | Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section [removed: at the end of] [added: within] this item. |

[added: Fiscal] Year [removed: Ended December 30,] 2017 [removed: compared] [added: Compared] to [removed: the] [added: Fiscal] Year [removed: Ended December 31,] 2016:

[removed: Net sales and] Organic Net Sales decreased [removed: 1.0%] [added: 0.9%] to [removed: $26.2] [added: $26.0] billion in 2017 compared to [added: $26.2 billion in] 2016 due to unfavorable volume/mix (1.5 [removed: pp)] [added: pp),] partially offset by higher pricing [removed: (0.5] [added: (0.6] pp).

Volume/mix was unfavorable in the United States and Canada, partially offset by growth in [removed: Europe and] Rest of [removed: World.][added: World and EMEA.]

Higher pricing in Rest of World and the United States was partially offset by lower pricing in Canada and [removed: Europe.][added: EMEA.]

| (a) | Adjusted EBITDA is a non-GAAP financial measure. See the Non-GAAP Financial Measures section [removed: at the end of] [added: within] this item. |

Operating [removed: income] [added: income/(loss)] increased [removed: 10.3%] [added: 8.1%] to [removed: $6.8] [added: $6.1] billion in 2017 compared to [removed: $6.1] [added: $5.6] billion in 2016.

This increase was primarily [removed: due to lower] [added: driven by savings from the] Integration Program and other restructuring [removed: expenses in the current period, savings from the] [added: activities, lower] Integration Program and other restructuring [removed: activities,] [added: expenses in 2017,] and lower overhead costs, partially offset by higher input costs in local currency, lower Organic Net Sales, lower unrealized gains on commodity hedges in [removed: the current period,] [added: 2017,] and the unfavorable impact of foreign currency (0.4 pp).

Net income/(loss) attributable to common shareholders increased [removed: 218.6%] [added: 220.3%] to [removed: $11.0] [added: $10.9] billion in 2017 compared to [removed: $3.5] [added: $3.4] billion in 2016.

The increase was primarily [removed: due to a lower effective tax rate in the current period,] [added: driven by U.S. Tax Reform,] the operating [removed: income] [added: income/(loss)] factors discussed above, [removed: and] the absence of the Series A Preferred Stock dividend in [removed: the current period,] [added: 2017, and favorable changes in other expense/(income), net,] partially offset by higher interest [removed: expense and higher other expense/(income), net,] [added: expense,] detailed as follows:

| • | The effective tax rate was a [removed: 98.7%] [added: 100.6%] benefit in 2017 compared to [removed: 27.5%] [added: 27.0%] expense in 2016. The change in the effective tax rate was primarily driven by the $7.0 billion tax benefit from U.S. Tax Reform, lower tax benefits associated with deferred tax effects of statutory rate changes, and taxes on income of foreign subsidiaries in [removed: the current period.] [added: 2017.] See Note [removed: 8,] [added: 11,] Income Taxes, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for additional information related to our effective tax rates. |

| • | The Series A Preferred Stock was fully redeemed on June 7, 2016. Accordingly, there were no dividends for 2017, compared to $180 million in [removed: the prior period.] [added: 2016.] See Equity and Dividends within this item for additional information. |

| • | Interest expense increased to $1.2 billion in 2017 compared to $1.1 billion in 2016. This increase was primarily [removed: due to] [added: driven by] the May 2016 issuances of long-term debt and borrowings under our commercial paper programs, which began in the second quarter of 2016. |

| • | Other expense/(income), net was [removed: an expense of $9] [added: $627] million [added: of income] in 2017 compared to [removed: income of $15] [added: $472] million [added: of income] in 2016. This increase was primarily [removed: due to] [added: driven by] a [added: $177 million non-cash curtailment gain from postretirement plan remeasurements in 2017. This was partially offset by a] $36 million nonmonetary currency devaluation loss in [removed: the current period] [added: 2017] compared to $24 million in [removed: the prior period] [added: 2016] related to our Venezuelan operations. See Note [removed: 13,] [added: 16,] Venezuela - Foreign Currency and Inflation, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for additional information. |

Adjusted EBITDA increased [removed: 1.9%] [added: 1.2%] to [removed: $7.9] [added: $7.7] billion in 2017 compared to [added: $7.6 billion in] 2016, primarily [removed: due to] [added: driven by] savings from the Integration Program and other restructuring activities and lower overhead costs, partially offset by higher input costs in local currency, [removed: a decline in Organic Net Sales, and] the unfavorable impact of foreign currency [removed: (0.4pp).][added: (0.2 pp), and a decline in Organic Net Sales.]

[removed: | • | United States] Segment Adjusted EBITDA increased [added: 2.2% to $5.9 billion in 2017 compared to $5.7 billion in 2016] primarily driven by Integration Program savings and lower overhead [removed: costs in the current period,] [added: costs,] partially offset by unfavorable key commodity costs, primarily in dairy, meat, and coffee, [removed: and volume/mix declines. |][added: as well as unfavorable volume/mix.]

[removed: | • | Europe] [added: Excluding the currency impact, the increase in] Segment Adjusted EBITDA was [removed: flat] primarily driven by [removed: productivity savings that were] [added: Organic Net Sales growth, partially] offset by higher input costs in local [removed: currency and the unfavorable impact of foreign currency (1.6 pp). |][added: currency.]

[removed: | • | Rest of World] [added: Excluding the currency impact,] Segment Adjusted EBITDA decreased primarily due to higher input costs in local [removed: currency, increased] [added: currency and higher] commercial investments, [removed: and the unfavorable impact of foreign currency (3.4 pp),] partially offset by Organic Net Sales growth. [removed: |]

[removed: | • | Canada] [added: Excluding the currency impact,] Segment Adjusted EBITDA decreased primarily due to [removed: a decline in] [added: lower] Organic Net [removed: Sales,] [added: Sales] partially offset by Integration Program [removed: savings,] [added: savings and] lower overhead costs in [removed: the current period, and the favorable impact of foreign currency (1.7 pp). |][added: 2017.]

Restatement of Previously Issued Consolidated Financial Statements:

We have restated our previously issued consolidated financial statements contained in this Annual Report on Form 10-K.

Refer to the “Explanatory Note” preceding Item 1, Business, for background on the restatement, the fiscal periods impacted, control considerations, and other information.

In addition, we have restated certain previously reported financial information at December 30, 2017 and for the fiscal years ended December 30, 2017 and December 31, 2016 in this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, including but not limited to information within the Consolidated Results of Operations, Results of Operations by Segment, and Non-GAAP Financial Measures sections.

We have also included certain restated quarterly information in the Supplemental Quarterly Financial Information section at the end of this item.

See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information related to the restatement, including descriptions of the misstatements and the impacts on our consolidated financial statements.

We have reflected this change in all historical periods presented.

Our 2018 results reflect goodwill and intangible asset impairment losses of $15.9 billion compared to $49 million in 2017.

The increase was primarily driven by impairment losses of $15.5 billion recognized in the fourth quarter of 2018.

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.

As we determined that it was more likely than not that the fair values of certain reporting units or brands were below their carrying amounts, we performed an interim impairment test 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.

As a result of U.S. Tax Reform, we recorded a net tax benefit of approximately $7.0 billion in 2017.

As a result, U.S. Tax Reform significantly impacted our provision for/(benefit from) income taxes and our effective tax rate, primarily in 2017, resulting in a lack of comparability year over year.

We disclose in this report certain non-GAAP financial measures.

The restatement described in the Overview section within this item did not significantly impact the drivers of our consolidated results of operations or our results of operations by segment.

In addition, during the period between December 29, 2018 and the filing of this Annual Report on Form 10-K, certain industry trends impacting our results of operations as described herein, including increased costs in procurement and logistics, pricing pressure as a result of increased private label competition, and consumer trends focused on health and wellness, have continued.

| | | | | | As Restated & Recast | | | | | | | As Restated & Recast | | | | | | | | | |

| Net sales | $ | 26,268 | | | $ | 26,076 | | | 0.7 | % | | $ | 26,076 | | | $ | 26,300 | | | (0.9 | )% |

| Operating income/(loss) | (10,220 | | ) | | 6,057 | | | | (268.7 | )% | | 6,057 | | | | 5,601 | | | | 8.1 | % |

| Diluted EPS | (8.36 | | ) | | 8.91 | | | | (193.8 | )% | | 8.91 | | | | 2.78 | | | | 220.5 | % |

| | | | | | As Restated | | | | | | | As Restated | | | | | | | | | |

| Net sales | $ | 26,268 | | | $ | 26,076 | | | 0.7 | % | | $ | 26,076 | | | $ | 26,300 | | | (0.9 | )% |

| Organic Net Sales(a) | 26,105 | | | | 25,876 | | | | 0.9 | % | | 25,963 | | | | 26,188 | | | | (0.9 | )% |

Fiscal Year 2018 Compared to Fiscal Year 2017:

Organic Net Sales increased 0.9% to $26.1 billion in 2018 compared to $25.9 billion in 2017 driven by favorable volume/mix (0.9 pp).

Volume/mix was favorable in all segments.

Pricing was flat, with lower pricing in the United States and Canada offset by higher pricing in Rest of World (primarily driven by highly inflationary environments in certain markets within Latin America) and EMEA.

Net sales decreased 0.9% to $26.1 billion in 2017 compared to $26.3 billion in 2016.

The impacts of foreign currency and acquisitions and divestitures were flat.

| | | | | | As Restated & Recast | | | | | | | As Restated & Recast | | | | | | | | | |

| | December 29, 2018 | | | | December 30, 2017 | | | | % Change | | | December 30, 2017 | | | | December 31, 2016 | | | | % Change | |

| Operating income/(loss) | $ | (10,220 | ) | | $ | 6,057 | | | (268.7 | )% | | $ | 6,057 | | | $ | 5,601 | | | 8.1 | % |

| Adjusted EBITDA(a) | 7,024 | | | | 7,664 | | | | (8.3 | )% | | 7,664 | | | | 7,574 | | | | 1.2 | % |

Fiscal Year 2018 Compared to Fiscal Year 2017:

Operating income/(loss) decreased 268.7% to a loss of $10.2 billion in 2018 compared to income of $6.1 billion in 2017.

This decrease was primarily due to higher impairment losses in 2018.

Rest of World is comprised of two operating segments: Latin America and AMEA.

We currently expect these changes to become effective in the first quarter of our fiscal year 2018.

As a result, we expect to restate our Europe and Rest of World segments to reflect these changes for historical periods presented as of March 31, 2018.

The 2015 Merger:

We completed the 2015 Merger on July 2, 2015.

As a result, 2016 was the first full year of combined Kraft and Heinz results, while 2015 included a full year of Heinz results and post-2015 Merger results of Kraft.

For comparability, we disclose in this report certain unaudited pro forma condensed combined financial information, which presents 2015 as if the 2015 Merger had been consummated on December 30, 2013, the first business day of our 2014 fiscal year, and combines the historical results of Heinz and Kraft.

See the Supplemental Unaudited Pro Forma Condensed Combined Financial Information section at the end of this item for additional information.

See Note 1, Background and Basis of Presentation, to the consolidated financial statements for additional information related to the 2015 Merger.

As of December 30, 2017, we have incurred $1.3 billion in capital expenditures since the inception of the Integration Program.

The Integration Program was designed to reduce costs, integrate, and optimize our combined organization.

Since the inception of the Integration Program, our cumulative pre-tax savings achieved are approximately $1,725 million, primarily benefiting the United States and Canada segments.

On December 22, 2017, the Tax Cuts and Jobs Act (“U.S. Tax Reform”) was enacted by the U.S. federal government.

The two material items that impacted us in 2017 were the corporate tax rate reduction and the one-time toll charge.

We have estimated the provisional tax impacts related to the toll charge, certain components of the revaluation of deferred tax assets and liabilities, including depreciation and executive compensation, and the change in our indefinite reinvestment assertion.

As a result, we recognized a net tax benefit of approximately $7.0 billion, including a reasonable estimate of our deferred income tax benefit of approximately $7.5 billion related to the corporate rate change, which was partially offset by a reasonable estimate of $312 million for the toll charge and approximately $125 million for other tax expenses, including a change in our indefinite reinvestment assertion.

53rd Week:

On December 9, 2016, our Board of Directors approved a change to our fiscal year end from Sunday to Saturday.

Effective December 31, 2016, we operate on a 52 or 53-week fiscal year ending on the last Saturday in December in each calendar year.

In prior years, we operated on a 52 or 53-week fiscal year ending the Sunday closest to December 31.

As a result, we occasionally have a 53rd week in a fiscal year.

Our 2015 fiscal year included a 53rd week of activity.

Series A Preferred Stock:

On June 7, 2016, we redeemed all outstanding shares of our Series A Preferred Stock.

We funded this redemption primarily through the issuance of long-term debt in May 2016, as well as other sources of liquidity, including our commercial paper program, U.S. securitization program, and cash on hand.

Due to the size of Kraft’s business relative to the size of Heinz’s business prior to the 2015 Merger, and for purposes of comparability, the Results of Operations include certain unaudited pro forma condensed combined financial information (the “pro forma financial information”) adjusted to assume that Kraft and Heinz were a combined company for the full year 2015.

This pro forma financial information reflects combined historical results, final purchase accounting adjustments, and adjustments to align accounting policies.

The pro forma adjustments impacted our consolidated results and all of our segments.

There are no pro forma adjustments for 2017 or 2016 as Kraft and Heinz were a combined company for these periods.

For more information, see Supplemental Unaudited Pro Forma Condensed Combined Financial Information.

In addition, we disclose in this report certain non-GAAP financial measures, which, for 2015, are derived from the pro forma financial information.

| Net sales | $ | 26,232 | | | $ | 26,487 | | | (1.0 | )% | | $ | 26,487 | | | $ | 18,338 | | | 44.4 | % |

| Operating income | 6,773 | | | | 6,142 | | | | 10.3 | % | | 6,142 | | | | 2,639 | | | | 132.7 | % |

| Diluted earnings/(loss) per share | 8.95 | | | | 2.81 | | | | 218.5 | % | | 2.81 | | | | (0.34 | | ) | | nm | |

| Pro forma net sales(a) | 26,232 | | | | 26,487 | | | | (1.0 | )% | | 26,487 | | | | 27,447 | | | | (3.5 | )% |

| Organic Net Sales(b) | 26,169 | | | | 26,432 | | | | (1.0 | )% | | 26,817 | | | | 26,728 | | | | 0.3 | % |

| (a) | There were no pro forma adjustments for 2017 or 2016, as Kraft and Heinz were a combined company for these periods. See the Supplemental Unaudited Pro Forma Condensed Combined Financial Information at the end of this item. |

Year Ended December 31, 2016 compared to the Year Ended January 3, 2016:

Net sales increased 44.4% to $26.5 billion in 2016 compared to 2015, primarily driven by the 2015 Merger.

Pro forma net sales decreased 3.5% primarily due to the unfavorable impacts of foreign currency (2.5 pp), 53rd week of shipments in 2015 (1.2 pp), and divestitures (0.1 pp).

We are exposed to market risks from adverse changes in commodity prices, foreign exchange rates, [removed: interest rates,] and [removed: production costs.][added: interest rates.]

See Note [removed: 1, Background and Basis of Presentation,] [added: 3, Significant Accounting Policies,] and Note [removed: 11,] [added: 14,] Financial Instruments, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for details of our market risk management policies and the financial instruments used to hedge those exposures.

The potential gain or loss on the fair value of our outstanding commodity contracts, foreign exchange contracts, [removed: cross-currency,] and [added: cross-currency] swap contracts, assuming a hypothetical 10% fluctuation in commodity [removed: prices, currency rates,] [added: prices] and [removed: swap] [added: foreign currency exchange] rates, would [removed: be] [added: have been] (in millions):

| | December [removed: 30, 2017 (52 weeks)] [added: 29, 2018] | | | | December [removed: 31, 2016 (52 weeks)] [added: 30, 2017] | | |

| Commodity contracts | $ | [removed: 23] [added: 38] | | | $ | [removed: 39] [added: 23] | |

| Foreign currency contracts | [removed: 173] [added: 100] | | | | [removed: 179] [added: 173] | | |

| Cross-currency swap contracts | [removed: 287] [added: 402] | | | | [removed: 306] [added: 287] | | |

It should be noted that any change in the fair value of [removed: the] [added: our derivative] contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items.

Changes in our portfolio of financial instruments are a function of our results of operations, debt [removed: repayment] [added: repayments] and debt issuances, market effects on debt and foreign currency, and our acquisition and divestiture activities.

We manage market risk by incorporating parameters within our risk management strategy that limit the types of derivative instruments, the derivative strategies we use, and the degree of market risk that we hedge with derivative instruments.

When we use financial instruments, we are exposed to credit risk that a counterparty might fail to fulfill its performance obligations under the terms of our agreement.

We minimize our credit risk by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure we have with each counterparty, and monitoring the financial condition of our counterparties.

All of our non-exchange traded derivative contracts are governed by an International Swaps and Derivatives Association master agreement.

Effect of Hypothetical 1% Fluctuation in LIBOR and CDOR:

Based on our current variable rate debt balance as of December 29, 2018, a hypothetical 1% increase in LIBOR and CDOR would increase our annual interest expense by approximately $19 million.

[removed: Kraft Heinz is] [added: We are] one of the largest [added: global] food and beverage [removed: companies in the world,] [added: companies,] with [added: 2018 net] sales [removed: in] [added: of] approximately [removed: 190 countries and territories.][added: $26 billion.]

On July 2, [removed: 2015 (the “2015 Merger Date”),] [added: 2015,] 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 [removed: Company] [added: Company,] and H. J. Heinz Company changed its name to Kraft Heinz Foods Company.

Before the consummation of the 2015 Merger, Heinz was controlled by Berkshire Hathaway Inc. [removed: ("Berkshire Hathaway")] [added: (“Berkshire Hathaway”)] and 3G Global Food Holdings, L.P. (“3G Capital”) (together, the [removed: "Sponsors"),] [added: “Sponsors”),] following their acquisition of H. J. Heinz Company [removed: (the “2013 Merger”).][added: on June 7, 2013.]

We have three reportable segments defined by geographic region: United States, Canada, and [removed: Europe.][added: Europe, Middle East, and Africa (“EMEA”).]

Our remaining businesses are combined and disclosed as “Rest of [removed: World”.][added: World.” Rest of World comprises two operating segments: Latin America and Asia Pacific (“APAC”).]

[removed: In] [added: Our segments reflect a change, effective in] the [removed: third] [added: first] quarter of [removed: 2017, we announced] our [removed: plans] [added: fiscal year 2018,] to reorganize [removed: certain of] our international businesses to better align our global geographies.

[removed: These plans include moving] [added: We moved] our Middle East and Africa businesses from the [removed: AMEA] [added: historical Asia Pacific, Middle East, and Africa (“AMEA”) operating] segment into the [added: historical] Europe [added: reportable] segment, forming the [removed: Europe, Middle East, and Africa (“EMEA”)] [added: new EMEA reportable] segment.

See Note [removed: 19,] [added: 22,] Segment Reporting, [removed: to the consolidated financial statements] [added: in Item 8, Financial Statements and Supplementary Data,] for our geographic financial information by segment.

In [removed: the first quarter of 2017,] [added: 2018,] we reorganized the products within our product categories to reflect how we manage our business.

| | December [removed: 30, 2017 (52 weeks)] [added: 29, 2018] | | | December [removed: 31, 2016 (52 weeks)] [added: 30, 2017] | | | [removed: January 3,] [added: December 31,] 2016 [removed: (53 weeks)] | |

| Condiments and sauces | [removed: 25] [added: 26] | % | | [removed: 24] [added: 25] | % | | [removed: 32] [added: 24] | % |

| Cheese and dairy | [removed: 21] [added: 20] | % | | 21 | % | | [removed: 15] [added: 21] | % |

| Frozen and chilled [removed: meals] [added: foods] | 10 | % | | 10 | % | | [removed: 12] [added: 10] | % |

| Meats and seafood | 10 | % | | 10 | % | | [removed: 8] [added: 10] | % |

Our products are sold through our own sales organizations and through independent brokers, [removed: agents] [added: agents,] and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, foodservice [removed: distributors] [added: distributors,] and institutions, including hotels, restaurants, hospitals, health care facilities, and certain government agencies.

Our largest customer, Walmart Inc., represented approximately 21% of our net sales in [removed: 2017,] [added: 2018,] approximately [removed: 22%] [added: 21%] of our net sales in [removed: 2016,] [added: 2017,] and approximately [removed: 20%] [added: 22%] of our net sales in [removed: 2015.][added: 2016.]

Additionally, we have significant customers in different regions around the world; however, none of these customers [removed: individually] are [added: individually] material to our consolidated business.

In [removed: 2017,] [added: 2018,] the five largest customers in our [removed: United States] [added: U.S.] segment accounted for approximately [removed: 48%] [added: 49%] of [removed: United States] [added: U.S.] segment net sales, the five largest customers in our Canada segment accounted for approximately [removed: 72%] [added: 71%] of Canada segment net sales, and the five largest customers in our [removed: Europe] [added: EMEA] segment accounted for approximately [removed: 31%] [added: 26%] of our [removed: Europe] [added: EMEA] segment net sales.

We manufacture (and contract for the manufacture of) our products from a wide variety of raw [removed: food] materials.

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, corn products, [removed: wheat] and [removed: other goods] [added: wheat products,] to manufacture our products.

In addition, we purchase and use significant quantities of [removed: resins] [added: resins, metals,] and cardboard to package our products and natural gas to operate our facilities.

We source these commodities from a variety of [removed: providers] [added: providers,] including large, international [removed: producers,] [added: producers] and smaller, local, independent sellers.

Where appropriate, we seek to establish preferred purchaser status [removed: and/or] [added: and] have developed strategic partnerships with many of our suppliers with the objective of achieving favorable pricing and dependable supply for many of our commodities.

The prices of raw materials and agricultural materials that we use in our products are affected by external factors, such as global competition for resources, currency fluctuations, severe weather or global climate change, consumer, industrial or investment demand, and changes in governmental regulation and trade, [added: tariffs,] alternative energy, and agricultural programs.

We compete with both branded and [removed: generic products, in addition to retailer brands,] [added: private label products sold by retailers,] wholesalers, and cooperatives.

We compete [removed: primarily] on the basis of product quality and innovation, brand recognition and loyalty, service, the ability to identify and satisfy consumer preferences, the introduction of new products and the effectiveness of our advertising campaigns and marketing programs, distribution, shelf space, merchandising support, and price.

Significant trademarks by segment based on net sales in [removed: 2017] [added: 2018] were:

| Canada | | Kraft, [removed: Heinz, Philadelphia,] Cracker Barrel, [removed: P’Tit Cheese,] [added: Heinz, Philadelphia,] Maxwell House, [removed: Tassimo*, Classico] [added: Classico, McCafe*, P’Tit Quebec, Tassimo*] |

| [removed: Europe] [added: EMEA] | | Heinz, Plasmon, Pudliszki, Honig, HP, [removed: Benedicta] [added: Kraft, Benedicta, Karvan Cevitam] |

| Rest of World | | Heinz, ABC, Master, Quero, [added: Kraft,] Golden Circle, [removed: Kraft,] Wattie's, [removed: Glucon D,] [added: Glucon-D,] Complan |

*Used under [removed: license][added: license.]

[removed: We sell some products under] [added: In 2018,] brands [removed: we license] [added: used under licenses] from third [removed: parties, including] [added: parties included] Capri Sun packaged drink pouches for sale in the United States, TGI Fridays frozen snacks and appetizers in the United States and Canada, McCafe ground, whole bean, and on-demand single cup coffees in the United States and Canada, and Taco Bell Home Originals Mexican-style food products in U.S. grocery stores.

In [added: addition, in] our agreements with Mondelēz International, Inc. (“Mondelēz [removed: International”),] [added: International”) following the spin-off of Kraft from Mondelēz International in 2012,] we each granted the other party various licenses to use certain of our and their respective intellectual property rights in named jurisdictions for certain periods of [removed: time following the spin-off of Kraft from Mondelēz International in 2012.][added: time.]

We [added: also] own numerous patents worldwide.

Patents, issued or applied for, cover inventions ranging from [removed: basic] packaging techniques to processes relating to specific products and to the products themselves.

| • | [removed: uncompromising product safety] [added: world-class] and [added: uncompromising food safety,] quality, [added: and consistency;] |

Although crops constituting [removed: some] [added: certain] of our raw food ingredients are harvested on a seasonal basis, [removed: most] [added: the majority] of our products are produced throughout the year.

We had approximately [removed: 39,000] [added: 38,000] employees as of December [removed: 30, 2017.][added: 29, 2018.]

Our business operations, including the production, transportation, storage, distribution, sale, display, advertising, marketing, labeling, quality and safety of our products and their ingredients, [added: and our] occupational [removed: safety] [added: safety, health,] and [removed: health] [added: privacy] practices, are subject to various laws and [removed: regulations administered by federal, state and local governmental agencies in the United States, as well as laws and regulations administered by government entities and agencies outside the United States in markets in which our products are manufactured, distributed or sold.][added: regulations.]

For 150 years, we have produced some of the world’s most beloved products at The Kraft Heinz Company (Nasdaq: KHC).

Our Vision is To Be the Best Food Company, Growing a Better World.

Our portfolio is a diverse mix of iconic and emerging brands.

As the guardians of these brands and the creators of innovative new products, we are dedicated to the sustainable health of our people and our planet.

The remaining businesses from the AMEA operating segment became the APAC operating segment.

We have reflected this change in all historical periods presented.

Additionally, our license to use the McCafe brand in Canada will expire in December 2019.

In the fourth quarter of 2018, we announced our plans to divest certain assets and operations, predominantly in Canada and India, including the intellectual property rights to Cracker Barrel and P’Tit Quebec in Canada, as well as Glucon-D and Complan globally.

See Note 5, Acquisitions and Divestitures, in Item 8, Financial Statements and Supplementary Data, for additional information on these transactions.

We sell certain products under brands we license from third parties.

| • | product innovations, renovations, and new technologies to meet changing consumer needs and drive growth; |

| • | superior, customer-preferred product and package performance; and |

| • | continuous process improvement and product optimization in pursuit of cost reductions. |

| Ambient foods | 10 | % | | 10 | % | | 9 | % |

Seasonality and Working Capital

While these factors influence our quarterly net sales, operating income/(loss), and cash flows at the product level, unless the timing of such events shift period-over-period (e.g., a shift in Easter timing), this seasonality does not typically have a significant effect on our consolidated results of operations or segment results.

For information related to our cash flows provided by/(used for) operating activities, including working capital items, see Liquidity and Capital Resources in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

These laws and regulations are administered by federal, state, and local government agencies in the United States, as well as government entities and agencies outside the United States in markets where our products are manufactured, distributed or sold.

In addition, the United Kingdom's impending withdrawal from the European Union (commonly referred to as “Brexit”) and other regulatory regime changes may add cost and complexity to our compliance efforts.

The following are our executive officers as of June 5, 2019 and all persons chosen to become executive officers as of the filing date of this Annual Report on Form 10-K:

| Miguel Patricio | | 53 | | Advisor and Incoming Chief Executive Officer |

| Nina Barton | | 45 | | Zone President of Canada and President of Digital Growth |

On April 22, 2019, we announced that Bernardo Hees will leave Kraft Heinz in 2019 to focus on other projects as a Partner of 3G Capital.

Miguel Patricio was appointed to succeed Mr. Hees as Chief Executive Officer and has served as Advisor to Kraft Heinz since May 5, 2019.

Mr. Patricio has been Chief of Special Global Projects-Marketing at Anheuser-Busch Inbev SA/NV (“AB InBev”), a multinational drink and brewing holdings company, since January 1, 2019.

Prior to that, he served as the Chief Marketing Officer at AB InBev since 2012.

Prior to his role as Chief Marketing Officer, since joining AB InBev in 1998, he also served as Zone President Asia Pacific, Zone President North America, Vice President Marketing of North America, and Vice President Marketing.

Mr. Patricio has also held several senior positions across the Americas at The Coca-Cola Company and Johnson & Johnson.

Mr. Patricio also invests in the 3G Special Situation Fund III (the “Fund”); his investment represents less than 1% of the Fund’s assets.

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.

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.

We manufacture and market food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products, throughout the world, under a host of iconic brands including Heinz, Kraft, Oscar Mayer, Philadelphia, Velveeta, Lunchables, Planters, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-O.

A globally recognized producer of delicious foods, we provide products for all occasions whether at home, in restaurants or on the go.

As of December 30, 2017, we had assets of $120.2 billion.

Our common stock is listed on The NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “KHC”.

While we were organized as a Delaware corporation in 2013 (as Heinz), both Kraft and Heinz each had been pioneers in the food industry for over 100 years.

See Note 1, Background and Basis of Presentation, and Note 2, Merger and Acquisition, to the consolidated financial statements for additional information on the 2015 Merger.

Rest of World is comprised of two operating segments: Latin America; and Asia Pacific, Middle East, and Africa (“AMEA”).

The remaining AMEA businesses will become the Asia Pacific (“APAC”) segment, which will remain in Rest of World.

We expect these changes to become effective in the first quarter of 2018.

As a result, we expect to restate our Europe and Rest of World segments to reflect these changes for historical periods presented in the first quarter of 2018.

| Ambient meals | 9 | % | | 9 | % | | 10 | % |

We completed the 2015 Merger on July 2, 2015.

As a result, 2016 was the first full year of combined Kraft and Heinz results, while 2015 included a full year of Heinz results and post-2015 Merger results of Kraft.

The year-over-year fluctuations in the percentages between 2015 and 2016 are primarily driven by including Kraft’s results.

| • | growth through product improvements and renovation, innovation, and line extensions, |

| • | superior customer satisfaction, and |

| • | cost reduction. |

Research and development expense was approximately $93 million in 2017, $120 million in 2016, and $105 million in 2015.

Seasonality

These factors influence our quarterly sales, operating income, and cash flows.

We do not currently expect these to have a material effect on our earnings or financial condition.

The following are our executive officers as of February 10, 2018:

| Eduardo Pelleissone | | 44 | | Executive Vice President of Global Operations |

| Carlos Piani | | 44 | | Zone President of Canada |

Eduardo Pelleissone assumed his current role as Executive Vice President of Global Operations upon the closing of the 2015 Merger and had previously held the same role at Heinz since July 2013.

Prior to joining Heinz, Mr. Pelleissone was Chief Executive Officer of ALL from May 2012 to June 2013.

Prior to assuming that role, Mr. Pelleissone held the roles of Chief Operating Officer from July 2011 to 2012 and Commercial Vice President of the Agriculture Segment at ALL from 2004 to 2011.

Carlos Piani was appointed Zone President of Canada in September 2015.

Prior to joining Kraft Heinz, Mr. Piani served as Chief Executive Officer of PDG Realty S.A. Empreendimentos e Participacoes, a real estate company, from August 2012 to August 2015.

Previously, he served as Co-Head of Private Equity of Vinci Partners, an independent asset management firm, from April 2010 to August 2012, as Chief Executive Officer of Companhia Energetica do Maranhao (“CEMAR”), an electricity distribution company, from March 2006 to April 2010, and as Chief Executive Officer of Equatorial Energia S/A, CEMAR’s controlling shareholder, from March 2007 to April 2010.

You can also read, access and copy any document that we file, including this Annual Report on Form 10-K, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.

Call the SEC at 1-800-SEC-0330 for information on the operation of the Public Reference Room.

See Note 18, Commitments and Contingencies, in Item 8, Financial Statements and Supplementary Data.

We are routinely 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.

For the fiscal year ended December [removed: 30, 2017][added: 29, 2018]

[removed: ][added: ]

| Title of each class | [added: Trading Symbol] | Name of exchange on which registered |

| Common stock, $0.01 par value | [added: KHC] | The [removed: NASDAQ] [added: Nasdaq] Stock Market LLC |

Yes [removed: x No] o [added: No x]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate website, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

| Non-accelerated filer o [removed: (Do not check if a smaller reporting company)] | Smaller reporting company o | Emerging growth company o |

The aggregate market value of the shares of common stock held by non-affiliates of the registrant, computed by reference to the closing price of such stock as of the last business day of the registrant’s most recently completed second quarter, was [removed: $52] [added: $38] billion.

As of [removed: February 10, 2018,] [added: June 5, 2019,] there were [removed: 1,218,801,890] [added: 1,219,938,804] shares of the registrant’s common stock outstanding.

| [Item 1. [removed: Business.](#sf2a3682d1a444228a399d1529cc1554a)] [added: Business.](#s96788c5d3cca4becb5e69e169335d329)] | [removed: [1](#sf2a3682d1a444228a399d1529cc1554a)] [added: [6](#s96788c5d3cca4becb5e69e169335d329)] |

| [Item 1A. Risk [removed: Factors.](#s268B72C436DE50B3938B31ABFEB2C6F2)] [added: Factors.](#sD4281BFE3BE45E6FB39C254248C95767)] | [removed: [6](#s268B72C436DE50B3938B31ABFEB2C6F2)] [added: [11](#sD4281BFE3BE45E6FB39C254248C95767)] |

| [Item 1B. Unresolved Staff [removed: Comments.](#sced140c3beb1491ebb5e7d9567f32843)] [added: Comments.](#s7034a2ce40b844ecb8c5675c085a7eb4)] | [removed: [16](#sced140c3beb1491ebb5e7d9567f32843)] [added: [25](#s7034a2ce40b844ecb8c5675c085a7eb4)] |

| [Item 2. [removed: Properties.](#s66f6b47f0b664b03a88cb2726c9b413f)] [added: Properties.](#s13a36501289d4c2dba2bb56e114e7e90)] | [removed: [16](#s66f6b47f0b664b03a88cb2726c9b413f)] [added: [25](#s13a36501289d4c2dba2bb56e114e7e90)] |

| [Item 3. Legal [removed: Proceedings.](#s6619510ADE5E5341A8F5579C4AF285FA)] [added: Proceedings.](#sB02B05B48F1C5BD7B567C09311D1D4AE)] | [removed: [16](#s6619510ADE5E5341A8F5579C4AF285FA)] [added: [25](#sB02B05B48F1C5BD7B567C09311D1D4AE)] |

| [Item 4. Mine Safety [removed: Disclosures.](#s2e7078aee9b24ddb974c4df2844f208d)] [added: Disclosures.](#sada53a9723ea4725a535542848b2d9ee)] | [removed: [16](#s2e7078aee9b24ddb974c4df2844f208d)] [added: [25](#sada53a9723ea4725a535542848b2d9ee)] |

| [Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities.](#s4dbd7e2e4ede45e8893abe891d530c5e)] [added: Securities.](#s7d844d1ee2564fe0aced19fade382e4c)] | [removed: [17](#s4dbd7e2e4ede45e8893abe891d530c5e)] [added: [25](#s7d844d1ee2564fe0aced19fade382e4c)] |

| [Item 6. Selected Financial [removed: Data.](#sfc6a26d0c771478dbb27e91cad1d7691)] [added: Data.](#s9ccc398af6ea4ce9850cf4503ea6f00e)] | [removed: [18](#sfc6a26d0c771478dbb27e91cad1d7691)] [added: [27](#s9ccc398af6ea4ce9850cf4503ea6f00e)] |

| [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations.](#sD2501E46994A59189971988B2FF07C47)] [added: Operations.](#s0B52057D6A1F50ECAE5C429B637C9F88)] | [removed: [19](#sD2501E46994A59189971988B2FF07C47)] [added: [28](#s0B52057D6A1F50ECAE5C429B637C9F88)] |

| [Consolidated Results of [removed: Operations](#s48CF3E76A0BF58D98BC5A73459E783A3)] [added: Operations](#s080FA3E3762D5E4B9A879A9C74BA49EA)] | [removed: [21](#s48CF3E76A0BF58D98BC5A73459E783A3)] [added: [30](#s080FA3E3762D5E4B9A879A9C74BA49EA)] |

| [Results of Operations by [removed: Segment](#sAB8653446F1F5E8D95B1F40BF5A5567D)] [added: Segment](#s14D09A80C26052F3A40CAB2ED488F7A0)] | [removed: [25](#sAB8653446F1F5E8D95B1F40BF5A5567D)] [added: [34](#s14D09A80C26052F3A40CAB2ED488F7A0)] |

| [New Accounting [removed: Pronouncements](#sA56CF9D904D259CB8FAA9412A6AF74EC)] [added: Pronouncements](#s5275F87810035C3086EE314B6EA42C40)] | [removed: [33](#sA56CF9D904D259CB8FAA9412A6AF74EC)] [added: [43](#s5275F87810035C3086EE314B6EA42C40)] |

| [Commodity [removed: Trends](#s13B796F19CDF55278FA772BE3DC4EE38)] [added: Trends](#s924DDA06F47C5EF4B5F8CE4398873C9D)] | [removed: [34](#s13B796F19CDF55278FA772BE3DC4EE38)] [added: [43](#s924DDA06F47C5EF4B5F8CE4398873C9D)] |

| [Liquidity and Capital [removed: Resources](#s883F8CF5F70D5840A345B36F31A978A2)] [added: Resources](#sEDB23168ED0B5D47A4101D82232B0233)] | [removed: [34](#s883F8CF5F70D5840A345B36F31A978A2)] [added: [43](#sEDB23168ED0B5D47A4101D82232B0233)] |

| [Off-Balance Sheet Arrangements and Aggregate Contractual [removed: Obligations](#s3D7D10AA500B575DB7E56A410050C3E9)] [added: Obligations](#s867641DC9B575B648F26C41C9F9DF33B)] | [removed: [36](#s3D7D10AA500B575DB7E56A410050C3E9)] [added: [46](#s867641DC9B575B648F26C41C9F9DF33B)] |

| [Equity and [removed: Dividends](#s56BE830B985D5EBBB3C7D678A52EE6CE)] [added: Dividends](#sD319457581A65E63BB785657D0D12CC5)] | [removed: [37](#s56BE830B985D5EBBB3C7D678A52EE6CE)] [added: [47](#sD319457581A65E63BB785657D0D12CC5)] |

| [Non-GAAP Financial [removed: Measures](#sBC0F2902E1505B9486885034CFE6FF28)] [added: Measures](#sC27811C6E6FC56D1BC59730713A67DA2)] | [removed: [41](#sBC0F2902E1505B9486885034CFE6FF28)] [added: [47](#sC27811C6E6FC56D1BC59730713A67DA2)] |

| [Item 7A. Quantitative and Qualitative Disclosures about Market [removed: Risk.](#s315B214CEAA05E43A66CB6975EBAE517)] [added: Risk.](#s54DCB18D09BA506E908C3CD72353F553)] | [removed: [46](#s315B214CEAA05E43A66CB6975EBAE517)] [added: [56](#s54DCB18D09BA506E908C3CD72353F553)] |

| [Item 8. Financial Statements and Supplementary [removed: Data.](#sE9B35769723555E69FCBF13D2E79B185)] [added: Data.](#s62FAD30B524E5A48814A639F9F87674E)] | [removed: [47](#sE9B35769723555E69FCBF13D2E79B185)] [added: [58](#s62FAD30B524E5A48814A639F9F87674E)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#s22905f134af54dc396bd38a459f23fe7)] [added: Firm](#s3e167372b2cc41e182c22d5e402ddb34)] | [removed: [47](#s22905f134af54dc396bd38a459f23fe7)] [added: [58](#s3e167372b2cc41e182c22d5e402ddb34)] |

| [Consolidated Statements of [removed: Income](#s6BA8FD6536485D00AFBE6141CD54D412)] [added: Income](#s35ECA156FAD253B6935453960C48AE17)] | [removed: [49](#s6BA8FD6536485D00AFBE6141CD54D412)] [added: [60](#s35ECA156FAD253B6935453960C48AE17)] |

| [Consolidated Statements of Comprehensive [removed: Income](#s2CA90041C6C65D5A805790B42B4524AB)] [added: Income](#s8238DA570F015A7AB4C35D2A4A37DBF0)] | [removed: [50](#s2CA90041C6C65D5A805790B42B4524AB)] [added: [61](#s8238DA570F015A7AB4C35D2A4A37DBF0)] |

| [Consolidated Balance [removed: Sheets](#sB8C62D5E34045798845F2E2A0D8227A0)] [added: Sheets](#s3DC8D94C11C85814858435C4FCB39DB6)] | [removed: [51](#sB8C62D5E34045798845F2E2A0D8227A0)] [added: [62](#s3DC8D94C11C85814858435C4FCB39DB6)] |

| [Consolidated Statements of [removed: Equity](#s99BB61B854F35017AD3D07D335CE5801)] [added: Equity](#s585FBEE8E432553CB7544A8CEA210A61)] | [removed: [52](#s99BB61B854F35017AD3D07D335CE5801)] [added: [63](#s585FBEE8E432553CB7544A8CEA210A61)] |

| [Consolidated Statements of Cash [removed: Flows](#sEB68982C71725B9F8E704F69AC07A4EB)] [added: Flows](#sCDBB1C83ECC355EFAC58298BC986EA19)] | [removed: [53](#sEB68982C71725B9F8E704F69AC07A4EB)] [added: [64](#sCDBB1C83ECC355EFAC58298BC986EA19)] |

| [Notes to Consolidated Financial [removed: Statements](#s702F0C5655A25BA0B39E887B99F2010F)] [added: Statements](#sF05690EA5FF75D67833802D3F701B3DD)] | [removed: [55](#s702F0C5655A25BA0B39E887B99F2010F)] [added: [66](#sF05690EA5FF75D67833802D3F701B3DD)] |

| [Note 1. [removed: Background and] Basis of [removed: Presentation](#sF1675398D9F951B59866B60E78A69BCF)] [added: Presentation](#s26a6d5658c6f4ff6ba5a5efb6d781cce)] | [removed: [55](#sF1675398D9F951B59866B60E78A69BCF)] [added: [66](#s26a6d5658c6f4ff6ba5a5efb6d781cce)] |

| [Note [removed: 3.] [added: 6.] Integration and Restructuring [removed: Expenses](#s5B1F9A6C22165E86B751C591E9FB862F)] [added: Expenses](#s89CC43FF5E9D5CB2B8E8A824341DE83D)] | [removed: [63](#s5B1F9A6C22165E86B751C591E9FB862F)] [added: [92](#s89CC43FF5E9D5CB2B8E8A824341DE83D)] |

| [Note [removed: 4.] [added: 7.] Restricted [removed: Cash](#s65C309A9D7F15345807FA7C6BB96259D)] [added: Cash](#s69FF4DDD8A0F553ABD9E585C30EB5D19)] | [removed: [66](#s65C309A9D7F15345807FA7C6BB96259D)] [added: [94](#s69FF4DDD8A0F553ABD9E585C30EB5D19)] |

| [Note [removed: 5. Inventories](#s239D1E6796AD5053B1EC6ECDA49B7EF3)] [added: 8. Inventories](#s74831CE4DDAF51B7964AC3192B72540E)] | [removed: [66](#s239D1E6796AD5053B1EC6ECDA49B7EF3)] [added: [94](#s74831CE4DDAF51B7964AC3192B72540E)] |

| [Note [removed: 6.] [added: 9.] Property, Plant and [removed: Equipment](#s6f0f695c3e3d41cf9689acc4a9b316a9)] [added: Equipment](#s0526b5922bf34f3f966cc6af3cbdf5c5)] | [removed: [66](#s6f0f695c3e3d41cf9689acc4a9b316a9)] [added: [95](#s0526b5922bf34f3f966cc6af3cbdf5c5)] |

10-K 1 form10-k2018.htm 10-K

Yes o No x

Yes o No x

| [PART I](#sd715c0d7b4564a809d2adfe7919bbc75) | [6](#sd715c0d7b4564a809d2adfe7919bbc75) |

| [PART II](#sF05690EA5FF75D67833802D3F701B3DD) | [25](#sb4f401fef14f41c189c3d2dac64aa396) |

| [Overview](#sA27A3CD00E965D319749ED3D1738FA8F) | [28](#sA27A3CD00E965D319749ED3D1738FA8F) |

| [Critical Accounting Estimates](#sF22B8941BFF6505194E1C78A3D5A43D7) | [39](#sF22B8941BFF6505194E1C78A3D5A43D7) |

| [Contingencies](#s3405B8AF93745981AF46E9E132530BF6) | [43](#s3405B8AF93745981AF46E9E132530BF6) |

| [Supplemental Unaudited Quarterly Financial Information](#s6f091e54b2c14ede9c090a80da425a92) | [53](#s6f091e54b2c14ede9c090a80da425a92) |

| [Note 2. Restatement of Previously Issued Consolidated Financial Statements](#s3b1db93c17bd4aff95f733cacfc0819a) | [67](#s3b1db93c17bd4aff95f733cacfc0819a) |

| [Note 3. Significant Accounting Policies](#s93070ab36120477cbc6084a5b26aa1b8) | [82](#s93070ab36120477cbc6084a5b26aa1b8) |

| [Note 4. New Accounting Standards](#sC043848CB30A5F77AFB211003436F41F) | [86](#sC043848CB30A5F77AFB211003436F41F) |

| [Note 5. Acquisitions and Divestitures](#s21C57E88A9435546BFE55B1236AB911F) | [89](#s21C57E88A9435546BFE55B1236AB911F) |

| [Note 13. Postemployment Benefits](#s287B6246049A5CC490174A84F1B1CB0E) | [106](#s287B6246049A5CC490174A84F1B1CB0E) |

| [Note 14. Financial Instruments](#s520DDC8E2E8C54B3B5CE051D4AF7A449) | [116](#s520DDC8E2E8C54B3B5CE051D4AF7A449) |

| [Note 17. Financing Arrangements](#s9F049C8E060750EFA0EABADA4C3F45AA) | [124](#s9F049C8E060750EFA0EABADA4C3F45AA) |

| [Note 19. Debt](#sa41cf46dc62d46e9953a8cc1f5d8400e) | [127](#sa41cf46dc62d46e9953a8cc1f5d8400e) |

| [Note 20. Capital Stock](#s5d005232e0c841feb9708983976c59d0) | [130](#s5d005232e0c841feb9708983976c59d0) |

| [Note 22. Segment Reporting](#s882AB11E60EF5B6CAFB292C1EBBB70EA) | [131](#s882AB11E60EF5B6CAFB292C1EBBB70EA) |

| [Note 24. Supplemental Guarantor Information](#sF74138B7551459B5AD77084DF397A9A0) | [200](#sF74138B7551459B5AD77084DF397A9A0) |

| [PART III](#sbf0151aa1e9d405c984534f8bd607896) | [217](#sbf0151aa1e9d405c984534f8bd607896) |

| [Executive Officers](#scd471a980d06403fbac7676be693e346) | [217](#scd471a980d06403fbac7676be693e346) |

| [Board of Directors](#sa8c42585fca746c7b74578b1438d5b93) | [217](#sa8c42585fca746c7b74578b1438d5b93) |

| [Corporate Governance and Board Matters](#s3c63a84cb5b941bdb57326b76f8fbc20) | [220](#s3c63a84cb5b941bdb57326b76f8fbc20) |

| [Board Committees and Membership—Audit Committee](#s9d5031fec6264a518cad08312813ae5d) | [221](#s9d5031fec6264a518cad08312813ae5d) |

| [Board Committees and Membership—Operations and Strategy Committee](#saceace1063ef42719271cae97a82e1f2) | [221](#saceace1063ef42719271cae97a82e1f2) |

| [Board Committees and Membership—Compensation Committee](#s72c786c466c04eae8d89427673c76a26) | [222](#s72c786c466c04eae8d89427673c76a26) |

| [Compensation of Non-Employee Directors](#s4ffccdd5f31e42e79eee5f9423fd1c87) | [223](#s4ffccdd5f31e42e79eee5f9423fd1c87) |

| [Compensation Discussion and Analysis](#sd9aa7937a793453bbd6835f1a43d1d91) | [224](#sd9aa7937a793453bbd6835f1a43d1d91) |

| [Executive Compensation Tables](#s5775306fb80442c4b5d9119d4b8c86ec) | [231](#s5775306fb80442c4b5d9119d4b8c86ec) |

| [Pay Ratio Disclosure](#sab63296c9fd94f35bf18b116a60e8501) | [238](#sab63296c9fd94f35bf18b116a60e8501) |

| [Securities Authorized for Issuance Under Equity Compensation Plans](#s0250ecd8c1e145959f750ba8a45be265) | [239](#s0250ecd8c1e145959f750ba8a45be265) |

| [Ownership of Equity Securities](#s43a0905fd093490585551acf8b9930b1) | [239](#s43a0905fd093490585551acf8b9930b1) |

| [Independence and Related Person Transactions](#sf9806869be664ff896f0389cef6e58cb) | [241](#sf9806869be664ff896f0389cef6e58cb) |

| [PART IV](#s976334e15c59461f96ea62e48ee09184) | [244](#s976334e15c59461f96ea62e48ee09184) |

| [Signatures](#sB9098C834473503AA1A0ECDEA41A2AD0) | [250](#sB9098C834473503AA1A0ECDEA41A2AD0) |

Explanatory Note

General

On May 2, 2019, management, in consultation with the Audit Committee of our Board of Directors, concluded that our audited consolidated financial statements and related disclosures for the fiscal years ended December 30, 2017 and December 31, 2016 included in our Annual Reports on Form 10-K, and each of our unaudited condensed consolidated financial statements for the quarterly and year-to-date periods in fiscal year 2017 and each of our unaudited condensed consolidated financial statements for the quarterly and year-to-date periods for the nine months ended September 29, 2018 included in our Quarterly Reports on Form 10-Q (unaudited condensed consolidated financial statements for the quarterly periods ended September 29, 2018, June 30, 2018, March 31, 2018, and September 30, 2017) and Form 10-Q/A (unaudited condensed consolidated financial statements for the quarterly periods ended July 1, 2017 and April 1, 2017) should no longer be relied upon due to misstatements that are described in greater detail below, and that we would restate such financial statements to make the necessary accounting corrections.

We discussed this conclusion with our independent registered public accounting firm, PricewaterhouseCoopers LLP.

10-K 1 form10-k2017.htm 2017 10-K

The Kraft Heinz Company

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Documents Incorporated by Reference

Portions of the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its annual meeting of shareholders expected to be held on April 23, 2018 are incorporated by reference into Part III hereof.

| [PART I](#s581E562C70925D039C27DFA2119D815B) | [1](#s581E562C70925D039C27DFA2119D815B) |

| [PART II](#s633946AA95B9563FA0815AD84BA1C00E) | [17](#s633946AA95B9563FA0815AD84BA1C00E) |

| [Overview](#s77088FC15B525C9BAD81BB24D3C9BD9E) | [19](#s77088FC15B525C9BAD81BB24D3C9BD9E) |

| [Critical Accounting Policies](#sD09EE4ACFAD158B195C3C065E3BA063A) | [30](#sD09EE4ACFAD158B195C3C065E3BA063A) |

| [Contingencies](#sCCD3D6936B0D5F4D89661FFDB82BEA8D) | [33](#sCCD3D6936B0D5F4D89661FFDB82BEA8D) |

| [Supplemental Unaudited Pro Forma Condensed Combined Financial Information](#sf2d36d092bc047dbae1f996d13ab555f) | [38](#sf2d36d092bc047dbae1f996d13ab555f) |

| [Note 2. Merger and Acquisition](#s7c4a59ce3c3c4f8db62a7a7852b86327) | [61](#s7c4a59ce3c3c4f8db62a7a7852b86327) |

| [Note 10. Postemployment Benefits](#s3376B5E1FA675B9B85846EE22BA8DA26) | [74](#s3376B5E1FA675B9B85846EE22BA8DA26) |

| [Note 11. Financial Instruments](#sF1E3553C7B03518CBC73BFD5493E29D8) | [83](#sF1E3553C7B03518CBC73BFD5493E29D8) |

| [Note 14. Financing Arrangements](#sC3B3819DB1E0505F9934AB0582AB432D) | [91](#sC3B3819DB1E0505F9934AB0582AB432D) |

| [Note 16. Debt](#sbed67bde028b44098bc8dbd7fbb8e5f0) | [92](#sbed67bde028b44098bc8dbd7fbb8e5f0) |

| [Note 17. Capital Stock](#s760ccd52522a4adc91df98259ca28f2b) | [94](#s760ccd52522a4adc91df98259ca28f2b) |

| [Note 19. Segment Reporting](#s5E0056C2EBA15193984199974CC76471) | [95](#s5E0056C2EBA15193984199974CC76471) |

| [Note 21. Supplemental Financial Information](#sD6E55A6D089451E38161A64ED0BBE3F8) | [99](#sD6E55A6D089451E38161A64ED0BBE3F8) |

| [PART III](#se05c24baa0f84ee9b996ef567f63d094) | [110](#se05c24baa0f84ee9b996ef567f63d094) |

| [PART IV](#s8551b797a2fc4c1fae8dd51d1791fba9) | [111](#s8551b797a2fc4c1fae8dd51d1791fba9) |

| [Signatures](#s97BE37FBFBD0591CA43A7EE8669C5256) | [116](#s97BE37FBFBD0591CA43A7EE8669C5256) |

As of December [removed: 30, 2017,] [added: 29, 2018,] we operated [removed: 83] [added: 84] manufacturing and processing facilities.

We own [removed: 80] [added: 81] and lease three of these facilities.

Our manufacturing and processing facilities count by segment as of December [removed: 30, 2017] [added: 29, 2018] was:

| United States | [removed: 41] [added: 40] | | 1 |

| Rest of World | [removed: 26] [added: 27] | | 2 |

| EMEA | 12 | | — |

In the fourth quarter of 2018, we announced our plans to divest certain assets and operations, predominantly in Canada and India, including one owned manufacturing facility in Canada and one owned and one leased facility in India.

See Note 5, Acquisitions and Divestitures, in Item 8, Financial Statements and Supplementary Data, for additional information on these transactions.

| Europe | 11 | | — |

At [removed: February 10, 2018,] [added: June 5, 2019,] there were approximately [removed: 53,000] [added: 49,000] holders of record of our common stock.

The following graph compares the cumulative total return on our common stock with the cumulative total return of the Standard & Poor's (“S&P”) 500 Index and the S&P Consumer Staples Food [added: and Soft Drink] Products, which we consider to be our peer group.

This graph covers the period from July 6, 2015 (the first day our common stock began trading on [removed: NASDAQ)] [added: Nasdaq)] through December [removed: 29, 2017] [added: 28, 2018] (the last trading day of our fiscal [removed: year).][added: year 2018).]

[removed: ][added: ]

| | Kraft Heinz | | | | S&P 500 | | | | S&P Consumer Staples Food [added: and Soft Drink] Products | | |

| December 31, 2015 | 102.07 | | | | 99.85 | | | | [removed: 107.48] [added: 110.18] | | |

| December 30, 2016 | 125.99 | | | | 111.79 | | | | [removed: 117.49] [added: 114.98] | | |

| December 29, 2017 | 115.44 | | | | 136.20 | | | | [removed: 118.95] [added: 128.53] | | |

Companies included in the S&P Consumer Staples Food [added: and Soft Drink] Products index change [removed: periodically.][added: periodically and are presented on the basis of the index as it is comprised on December 29, 2018.]

Issuer Purchases of Equity Securities During the Three Months Ended December [removed: 30, 2017][added: 29, 2018]

Our share repurchase activity in the three months ended December [removed: 30, 2017] [added: 29, 2018] was:

| | | Total Number of [removed: Shares(a)] [added: Shares Purchased(a)] | | | Average Price Paid Per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b) | | | [added: Approximate] Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | |

| (a) | Includes the following types of share repurchase activity, when they occur: (1) shares repurchased in connection with the exercise of stock options (including periodic repurchases using option exercise proceeds), (2) shares withheld for tax liabilities associated with the vesting of [removed: RSUs,] [added: restricted stock units,] and (3) shares repurchased related to employee benefit programs (including our annual bonus swap program) or to offset the dilutive effect of equity issuances. |

See Equity and Dividends in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a discussion of cash dividends declared on our common stock.

| December 28, 2018 | 67.49 | | | | 129.11 | | | | 121.93 | | |

| 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 | | | | | | | — | | | | | |

Our stock began publicly trading on July 6, 2015.

Our quarterly highest and lowest market prices and dividends declared are:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2017 Quarters | | | | | | | | | | | | | | | | 2016 Quarters | | | | | | | | | | | | | | |

| | First | | | | Second | | | | Third | | | | Fourth | | | | First | | | | Second | | | | Third | | | | Fourth | | |

| Market price-high | $ | 97.77 | | | $ | 93.88 | | | $ | 90.38 | | | $ | 82.48 | | | $ | 79.16 | | | $ | 89.40 | | | $ | 90.54 | | | $ | 90.15 | |

| Market price-low | 85.41 | | | | 85.45 | | | | 77.40 | | | | 75.21 | | | | 68.18 | | | | 76.64 | | | | 84.25 | | | | 79.69 | | |

| Dividends declared | 0.60 | | | | 0.60 | | | | 0.625 | | | | 0.625 | | | | 0.575 | | | | 0.575 | | | | 0.60 | | | | 0.60 | | |

During 2017, Mead Johnson Nutrition Company was removed from the index, therefore it is excluded from the table and chart above.

| 10/1/2017 - 11/4/2017 | | 648 | | | $ | 77.25 | | | — | | | $ | — | |

| 11/5/2017 - 12/2/2017 | | — | | | — | | | | — | | | — | | |

| 12/3/2017 - 12/30/2017 | | 1,428 | | | 80.46 | | | | — | | | — | | |

| For the Three Months Ended December 30, 2017 | | 2,076 | | | | | | | — | | | | | |

The following table presents selected consolidated financial data for [removed: 2017, 2016, 2015, 2014,] the [removed: 2013 Successor Period, the 2013 Predecessor Period, and Fiscal 2013.][added: last five fiscal years.]

| | December [added: 29, 2018 (52 weeks) | | | | December] 30, 2017 (52 weeks) | | | | December 31, 2016 (52 [removed: weeks)(a)] [added: weeks)(h)] | | | | January 3, 2016 (53 weeks) | | | | December 28, 2014 (52 weeks) | | | [removed: | February 8 - December 29, 2013 (29 weeks) | | | | April 29 - June 7, 2013 (6 weeks) | | | | April 28, 2013 (52 weeks) | | |]

| | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | |]

| Period Ended: | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | |]

| Income/(loss) [removed: from continuing operations] per common [removed: share(b): | | | | | | | |] [added: share:] | | | | | | | | | | | | | | | | | | | |

| Redeemable preferred [removed: stock] [added: stock(g)] | — | | | | — | | | | [removed: 8,320] [added: —] | | | | 8,320 | | | | 8,320 | | | [removed: | NA | | | | — | | |]

| Cash dividends per common share | [removed: 2.45 | | | | 2.35] [added: 2.50] | | | | [removed: 1.70] [added: 2.45] | | | | [removed: —] [added: 2.35] | | | | [removed: —] [added: 1.70] | | | | — | | | [removed: | 2.06 | | |]

| [removed: (a)] [added: (h)] | On December 9, 2016, our Board of Directors approved a change to our fiscal year end from Sunday to Saturday. Effective December 31, 2016, we operate on a [removed: 52] [added: 52-] or 53-week fiscal year ending on the last Saturday in December in each calendar year. In prior years, we operated on a [removed: 52] [added: 52-] or 53-week fiscal year ending the Sunday closest to December 31. As a result, we occasionally have a 53rd week in a fiscal year. Our 2015 fiscal year includes a 53rd week of activity. |

| [removed: (d)] [added: (b)] | The increases in net [removed: sales,] [added: sales in 2016 and in 2015 compared to the prior year, and the increases in] total [removed: assets,] [added: assets] and long-term debt from December 28, 2014 to January 3, [removed: 2016 reflect the impact of] [added: 2016, were primarily driven by] the 2015 Merger. [removed: See Note 2, Merger and Acquisition, to the consolidated financial statements for additional information.] |

Our fiscal years 2018, 2017, and 2016 include a full year of Kraft Heinz results.

Our fiscal year 2015 includes a full year of Heinz results and post-merger Kraft results.

Our fiscal year 2014 includes a full year of Heinz results.

Certain prior period amounts have been restated for the correction of misstatements described below.

This information should be read in conjunction with the “Explanatory Note” immediately preceding Item 1 of this Annual Report on Form 10-K, with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and with our consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K, including further details related to the misstatements discussed in Note 2, Restatement of Previously Issued Consolidated Financial Statements.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | As Restated | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | (Unaudited) | | | | | | |

| 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 | | ) |

| 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 | | |

| (a) | As previously disclosed, we adopted a new accounting standard related to revenue recognition in the first quarter of 2018, and at the same time, we retrospectively corrected immaterial misclassifications in our statements of income principally related to customer incentive program expense misclassifications. This resulted in net sales decreases of $147 million in 2017, $152 million in 2016, and $55 million in 2015. |

| (c) | We have restated previously disclosed consolidated financial data for fiscal years 2017, 2016, and 2015, as well as the related balance sheet dates, to correct misstatements principally related to supplier contracts and related arrangements, as well as other identified out-of-period and uncorrected misstatements. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information. |

| (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. |

| (e) | The decreases in income/(loss), income/(loss) attributable to common shareholders, and basic and diluted income/(loss) per common share in 2018 compared to 2017, and the decrease in total assets from December 30, 2017 to December 29, 2018, were primarily driven by non-cash impairment losses in 2018. See Note 10, Goodwill and Intangible Assets, in Item 8, Financial Statements and Supplementary Data, for additional information. |

| (f) | Amounts exclude the current portion of long-term debt. |

| (g) | On June 7, 2016, we redeemed all outstanding shares of our 9.00% cumulative compounding preferred stock, Series A (“Series A Preferred Stock”). See Equity and Dividends in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, along with Note 19, Debt, and Note 20, Capital Stock, in Item 8, Financial Statements and Supplementary Data, for additional information. |

Periods Presented:

On June 7, 2013, H. J. Heinz Company was acquired by Heinz (formerly known as Hawk Acquisition Holding Corporation), a Delaware corporation controlled by the Sponsors, pursuant to the Agreement and Plan of Merger, dated February 13, 2013, as amended by the Amendment to Agreement and Plan of Merger, dated March 4, 2013, by and among H. J. Heinz Company, Heinz, and Hawk Acquisition Sub, Inc. (“Hawk”).

The 2013 Merger established a new accounting basis for Heinz.

Accordingly, the consolidated financial statements present both predecessor and successor periods, which relate to the accounting periods preceding and succeeding the completion of the 2013 Merger.

The predecessor and successor periods are separated by a vertical line to highlight the fact that the financial information for such periods has been prepared under two different historical-cost bases of accounting.

Additionally, on October 21, 2013, our Board of Directors approved a change in our fiscal year-end from the Sunday closest to April 30 to the Sunday closest to December 31.

In 2013, as a result of the change in fiscal year-end, the 2013 Merger, and the creation of Hawk, there are three 2013 reporting periods as described below.

The “Successor” (Heinz, renamed to The Kraft Heinz Company at the closing of the 2015 Merger) period includes:

| | |

| --- | --- |

| • | The consolidated financial statements for the year ended December 30, 2017 (a 52-week period, including a full year of Kraft Heinz results); |

| • | The consolidated financial statements for the year ended December 31, 2016 (a 52-week period, including a full year of Kraft Heinz results); |

| • | The consolidated financial statements for the year ended January 3, 2016 (a 53-week period, including a full year of Heinz results and post-2015 Merger results of Kraft); |

| • | The consolidated financial statements for the year ended December 28, 2014 (a 52-week period, including a full year of Heinz results); and |

- The period from February 8, 2013 through December 29, 2013 (the “2013 Successor Period”), reflecting:

| ▪ | The creation of Hawk on February 8, 2013 and the activity from February 8, 2013 to June 7, 2013, which related primarily to the issuance of debt and recognition of associated issuance costs and interest expense; and |

| ▪ | All activity subsequent to the 2013 Merger. Therefore, the 2013 Successor Period includes 29 weeks of operating activity (June 8, 2013 to December 29, 2013). We indicate in the selected financial data table the weeks of operating activities in this period. |

The “Predecessor” (H. J. Heinz Company) period includes, but is not limited to:

| • | The consolidated financial statements of H. J. Heinz Company prior to the 2013 Merger on June 7, 2013, which includes the period from April 29, 2013 through June 7, 2013 (the “2013 Predecessor Period”); this represents six weeks of activity from April 29, 2013 through the 2013 Merger; and |

| • | The consolidated financial statements of H. J. Heinz Company for the fiscal year from April 30, 2012 to April 28, 2013 (“Fiscal 2013”). |

Selected Financial Data:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Successor | | | | | | | | | | | | | | | | | | | | Predecessor (H. J. Heinz Company) | | | | | | |

| Net sales(b)(d) | $ | 26,232 | | | $ | 26,487 | | | $ | 18,338 | | | $ | 10,922 | | | $ | 6,240 | | | $ | 1,113 | | | $ | 11,529 | |

| Income/(loss) from continuing operations(b) | 10,990 | | | | 3,642 | | | | 647 | | | | 672 | | | | (66 | | ) | | (191 | | ) | | 1,102 | | |

| Income/(loss) from continuing operations attributable to common shareholders(b) | 10,999 | | | | 3,452 | | | | (266 | | ) | | (63 | | ) | | (1,118 | | ) | | (194 | | ) | | 1,088 | | |

| Basic | 9.03 | | | | 2.84 | | | | (0.34 | | ) | | (0.17 | | ) | | (2.97 | | ) | | (0.60 | | ) | | 3.39 | | |

| Diluted | 8.95 | | | | 2.81 | | | | (0.34 | | ) | | (0.17 | | ) | | (2.97 | | ) | | (0.60 | | ) | | 3.37 | | |

| As of: | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets(d) | 120,232 | | | | 120,480 | | | | 122,973 | | | | 36,571 | | | | 38,681 | | | | NA | | | | 12,920 | | |

| Long-term debt(c)(d) | 28,333 | | | | 29,713 | | | | 25,151 | | | | 13,358 | | | | 14,326 | | | | NA | | | | 3,830 | | |

| (b) | Amounts exclude the operating results and any associated impairment charges and losses on sale related to the Company's Shanghai LongFong Foods business in China and U.S. Foodservice frozen desserts business, which were divested in Fiscal 2013. |

| (c) | Amounts exclude the current portion of long-term debt. Additionally, amounts include interest rate swap hedge accounting adjustments of $123 million at April 28, 2013. There were no interest rate swaps requiring such hedge accounting adjustments at December 30, 2017, December 31, 2016, January 3, 2016, December 28, 2014, or December 29, 2013. |

We have audited the accompanying consolidated balance sheets of The Kraft Heinz Company and its subsidiaries [added: (the “Company”)] as of December [removed: 30, 2017] [added: 29, 2018] and December [removed: 31, 2016,] [added: 30, 2017,] and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December [removed: 30, 2017,] [added: 29, 2018,] including the related notes and [removed: the] financial statement schedule listed in the index appearing under Item [removed: 15(a)] [added: 15 (a)] (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December [removed: 30, 2017,] [added: 29, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December [removed: 30, 2017] [added: 29, 2018] and December [removed: 31, 2016,] [added: 30, 2017,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the three years in the period ended December [removed: 30, 2017] [added: 29, 2018] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company [removed: maintained,] [added: did not maintain,] in all material respects, effective internal control over financial reporting as of December [removed: 30, 2017,] [added: 29, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the [removed: COSO.][added: COSO because material weaknesses in internal control over financial reporting existed as of that date related to the risk assessment component of internal control, as the Company did not appropriately design controls in response to the risk of material misstatement due to changes in their business environment.]

As discussed in Note [removed: 1] [added: 4] to the consolidated financial statements, the Company changed the manner in which it presents [removed: cash receipts relating to beneficial interests obtained in securitized trade receivables] [added: net periodic benefit costs] in [removed: 2017.][added: 2018.]

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial [removed: reporting,] [added: reporting] included in [removed: Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.][added: management’s report referred to above.]

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [removed: ("PCAOB")] [added: (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

| | December [removed: 30, 2017 (52 weeks)] [added: 29, 2018] | | | | December [removed: 31, 2016 (52 weeks)] [added: 30, 2017] | | | | [removed: January 3,] [added: December 31,] 2016 [removed: (53 weeks)] | | |

| Net sales | $ | 26,232 | | | $ | [removed: 26,487] [added: (156] | [added: )] | | [added: (c)(g) | |] $ | [removed: 18,338] [added: 26,076] | | [added: | $ | — | | | $ | 26,076 | |]

| Cost of products sold | 16,529 | | | | [removed: 16,901] [added: (44] | | [added: )] | | [removed: 12,577] [added: (a)(b)(c)(g)] | | [added: 16,485] | [added: | | | 558 | | | | 17,043 | | |]

| Selling, general and administrative expenses | 2,930 | | | | [removed: 3,444] [added: (32] | | [added: )] | | [removed: 3,122] | | [added: 2,898] | [added: | | | 78 | | | | 2,976 | | |]

| Interest expense | [removed: 1,234] [added: 1,284] | | | | [removed: 1,134] [added: 1,234] | | | | [removed: 1,321] [added: 1,134] | | |

| Other expense/(income), net | 9 | | | | [removed: (15] [added: —] | | [added: | | | | 9 | | | | (636 | |] ) | | [removed: 305] [added: (627] | | [added: )] |

| Income/(loss) before income taxes | 5,530 | | | | [removed: 5,023] [added: (80] | | [added: )] | | [removed: 1,013] | | [added: 5,450] | [added: | | | — | | | | 5,450 | | |]

| Provision for/(benefit from) income taxes | (5,460 | | ) | | [removed: 1,381] [added: (22] | | [added: )] | | [removed: 366] [added: (a)(b)(e)(f)(g)] | | [added: (5,482] | [added: | ) | | — | | | | (5,482 | | ) |]

| Net income/(loss) | 10,990 | | | | [removed: 3,642] [added: (58] | | [added: )] | | [removed: 647] | | [added: 10,932] | [added: | | | — | | | | 10,932 | | |]

| Net income/(loss) attributable to noncontrolling interest | [removed: (9] [added: (62] | | ) | | [removed: 10] [added: (9] | | [added: )] | | [removed: 13] [added: 10] | | |

| Net income/(loss) attributable to Kraft Heinz | 10,999 | | | | [removed: 3,632] [added: (58] | | [added: )] | | [removed: 634] | | [added: 10,941] | [added: | | | — | | | | 10,941 | | |]

| Preferred dividends | — | | | | [removed: 180] [added: —] | | | | [removed: 900] [added: 180] | | |

| Net income/(loss) attributable to common shareholders | $ | 10,999 | | | $ | [removed: 3,452] [added: (58] | [added: )] | | [added: | |] $ | [removed: (266] [added: 10,941] | [removed: )] | [added: | $ | — | | | $ | 10,941 | |]

| Basic earnings/(loss) | $ | 9.03 | | | $ | [removed: 2.84] [added: (0.05] | [added: )] | | [added: | |] $ | [removed: (0.34] [added: 8.98] | [removed: )] | [added: | $ | — | | | $ | 8.98 | |]

| Diluted earnings/(loss) | 8.95 | | | | [removed: 2.81] [added: (0.04] | | [added: )] | | [removed: (0.34] | | [removed: )] [added: 8.91] | [added: | | | — | | | | 8.91 | | |]

| Net income/(loss) | [removed: $] [added: 3,642] | [removed: 10,990] | | | [removed: $] [added: (36] | [removed: 3,642] | [added: )] | | [removed: $] | [removed: 647] | [added: 3,606] | [added: | | | — | | | | 3,606 | | |]

| Foreign currency translation adjustments | 1,184 | | | | [removed: (986] [added: 1] | | [removed: )] | | [removed: (1,604] [added: (b)(e)] | | [removed: )] [added: 1,185] | [added: | |]

| Net deferred gains/(losses) on net investment hedges | [removed: (353] [added: 284] | | [removed: )] | | [removed: 226] [added: (353] | | [added: )] | | [removed: 506] [added: 226] | | |

| Net actuarial gains/(losses) arising during the period | [removed: 69] [added: 58] | | | | [removed: (40] [added: 69] | | [removed: )] | | [removed: 23] [added: (40] | | [added: )] |

| Prior service credits/(costs) arising during the period | [removed: 17] [added: 3] | | | | [removed: 97] [added: 17] | | | | [removed: 923] [added: 31] | | |

| [removed: Reclassification of net] [added: Net] postemployment benefit losses/(gains) [added: reclassified to net income/(loss)] | (309 | | ) | | [removed: (207] [added: —] | | [removed: )] | | [removed: (85] | | [added: (309 | |] ) |

| Net deferred gains/(losses) on cash flow hedges | [removed: (113] [added: 99] | | [removed: )] | | [removed: 46] [added: (113] | | [added: )] | | [removed: (6] [added: 46] | | [removed: )] |

| Net deferred losses/(gains) on cash flow hedges reclassified to net [removed: income] [added: income/(loss)] | [removed: 85] [added: (44] | | [added: )] | | [removed: (87] [added: 85] | | [removed: )] | | [removed: 120] [added: (87] | | [added: )] |

| Total other comprehensive income/(loss) | 580 | | | | [removed: (951] [added: 1] | | [removed: )] | | [removed: (123] | | [removed: )] [added: 581] | [added: | |]

| Total comprehensive income/(loss) | 11,570 | | | | [removed: 2,691] [added: (57] | | [added: )] | | [removed: 524] | | [added: 11,513] | [added: | |]

| Comprehensive income/(loss) attributable to noncontrolling interest | [removed: (3] [added: (76] | | ) | | [removed: 16] [added: (3] | | [added: )] | | [removed: (13] [added: 16] | | [removed: )] |

| Comprehensive income/(loss) attributable to Kraft Heinz | $ | 11,573 | | | $ | [removed: 2,675] [added: (57] | [added: )] | | [added: | |] $ | [removed: 537] [added: 11,516] | |

| | December [added: 29, 2018 | | | | December] 30, 2017 | | | | December 31, 2016 | | |

| Cash and cash equivalents | $ | 1,629 | | | $ | [removed: 4,204] [added: —] | | [added: | | | $ | 1,629 | |]

| Trade receivables (net of allowances of $23 at December 30, [removed: 2017 and $20 at December 31, 2016)] [added: 2017)] | 921 | | | | [removed: 769] [added: —] | | | [added: | | | 921 | | |]

| Sold receivables | [removed: 353] [added: —] | | | | [removed: 129] [added: 353] | | |

| Income taxes receivable | 582 | | | | [removed: 260] [added: (44] | | [added: )] | [added: | (a)(b)(d)(e)(g) | | 538 | | |]

| Inventories | 2,815 | | | | [removed: 2,684] [added: (55] | | [added: )] | [added: | (d)(g) | | 2,760 | | |]

The risk assessment material weakness gave rise to additional material weaknesses as the Company did not design and maintain effective controls over the accounting for supplier contracts and related arrangements or to reassess the level of precision used to review the impairment assessments related to forecasted cash flows used within goodwill and indefinite-lived intangible asset impairment calculations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses referred to above are described in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A.

We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2018 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Restatement of Previously Issued Financial Statements

As discussed in Note 2 to the consolidated financial statements, the Company has restated its 2017 and 2016 financial statements to correct misstatements.

| | | | | | As Restated & Recast | | | | | | |

| Net sales | $ | 26,268 | | | $ | 26,076 | | | $ | 26,300 | |

| Cost of products sold | 17,347 | | | | 17,043 | | | | 17,154 | | |

| Gross profit | 8,921 | | | | 9,033 | | | | 9,146 | | |

| Selling, general and administrative expenses, excluding impairment losses | 3,205 | | | | 2,927 | | | | 3,527 | | |

| Goodwill impairment losses | 7,008 | | | | — | | | | — | | |

| Intangible asset impairment losses | 8,928 | | | | 49 | | | | 18 | | |

| Selling, general and administrative expenses | 19,141 | | | | 2,976 | | | | 3,545 | | |

| Operating income/(loss) | (10,220 | | ) | | 6,057 | | | | 5,601 | | |

| Income/(loss) before income taxes | (11,321 | | ) | | 5,450 | | | | 4,939 | | |

| Provision for/(benefit from) income taxes | (1,067 | | ) | | (5,482 | | ) | | 1,333 | | |

| Net income/(loss) | (10,254 | | ) | | 10,932 | | | | 3,606 | | |

| Net income/(loss) attributable to Kraft Heinz | (10,192 | | ) | | 10,941 | | | | 3,596 | | |

| Net income/(loss) attributable to common shareholders | $ | (10,192 | ) | | $ | 10,941 | | | $ | 3,416 | |

| Basic earnings/(loss) | $ | (8.36 | ) | | $ | 8.98 | | | $ | 2.81 | |

| Diluted earnings/(loss) | (8.36 | | ) | | 8.91 | | | | 2.78 | | |

| | | | | | As Restated | | | | | | |

| Net income/(loss) | $ | (10,254 | ) | | $ | 10,932 | | | $ | 3,606 | |

| Foreign currency translation adjustments | (1,187 | | ) | | 1,185 | | | | (979 | | ) |

| Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) | (7 | | ) | | — | | | | — | | |

| Amounts excluded from the effectiveness assessment of cash flow hedges | 2 | | | | — | | | | — | | |

| Net postemployment benefit losses/(gains) reclassified to net income/(loss) | (118 | | ) | | (309 | | ) | | (204 | | ) |

| Total comprehensive income/(loss) | (11,157 | | ) | | 11,513 | | | | 2,599 | | |

| Comprehensive income/(loss) attributable to Kraft Heinz | $ | (11,081 | ) | | $ | 11,516 | | | $ | 2,583 | |

| | | | | | As Restated | | |

| Cash and cash equivalents | $ | 1,130 | | | $ | 1,629 | |

| Trade receivables (net of allowances of $24 at December 29, 2018 and $23 at December 30, 2017) | 2,129 | | | | 921 | | |

| Inventories | 2,667 | | | | 2,760 | | |

| Prepaid expenses | 400 | | | | 345 | | |

| Other current assets | 1,221 | | | | 655 | | |

| Assets held for sale | 1,376 | | | | — | | |

| Total current assets | 9,075 | | | | 7,201 | | |

| Goodwill | 36,503 | | | | 44,825 | | |

| Intangible assets, net | 49,468 | | | | 59,432 | | |

February 16, 2018

| Gross profit | 9,703 | | | | 9,586 | | | | 5,761 | | |

| Operating income | 6,773 | | | | 6,142 | | | | 2,639 | | |

| Dividends declared | 2.45 | | | | 2.35 | | | | 1.70 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 28, 2014 | $ | 4 | | | $ | 367 | | | $ | 7,320 | | | $ | — | | | $ | (574 | ) | | $ | — | | | $ | 219 | | | $ | 7,336 | |

| Exercise of warrants | — | | | | (367 | | ) | | 367 | | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Issuance of common stock to Sponsors | 2 | | | | — | | | | 9,998 | | | | — | | | | — | | | | — | | | | — | | | | 10,000 | | |

| Acquisition of Kraft Foods Group, Inc. | 6 | | | | — | | | | 42,849 | | | | — | | | | — | | | | — | | | | — | | | | 42,855 | | |

| Amortization of inventory step-up | — | | | | — | | | | 347 | | |

| Pension and postretirement benefit plan contributions | (1,518 | | ) | | (344 | | ) | | (286 | | ) |

| Write-off of debt issuance costs | 2 | | | | — | | | | 236 | | |

| Debt prepayment and extinguishment costs | — | | | | — | | | | (105 | | ) |

| Debt issuance costs | (6 | | ) | | (53 | | ) | | (98 | | ) |

| Proceeds from issuance of common stock to Sponsors | — | | | | — | | | | 10,000 | | |

We manufacture and market food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products throughout the world.

All share and per share amounts in this Annual Report on Form 10-K, including the consolidated financial statements and related notes have been retroactively adjusted for all historical periods presented prior to the 2015 Merger Date to give effect to this conversion, including reclassifying an amount equal to the change in value of common stock to additional paid-in capital.

In the 2015 Merger, all outstanding shares of Kraft common stock were converted into the right to receive, on a one\-for-one basis, shares of Kraft Heinz common stock.

Deferred shares and restricted shares of Kraft were converted to deferred shares and restricted shares of Kraft Heinz, as applicable.

In addition, upon the completion of the 2015 Merger, the Kraft shareholders of record immediately prior to the closing of the 2015 Merger received a special cash dividend of $16.50 per share.

The Sponsors initially owned 850 million shares of common stock in Heinz.

Berkshire Hathaway also held a warrant to purchase 46 million additional shares of common stock, which it exercised in June 2015.

Additionally, in connection with the 2013 Merger, we issued an $8.0 billion preferred stock investment in Heinz which entitled Berkshire Hathaway to a 9.00% annual dividend.

Prior to, but in connection with, the 2015 Merger, the Sponsors made equity investments whereby they purchased an additional 500 million newly issued shares of Heinz common stock for an aggregate purchase price of $10.0 billion.

We base our estimates on historical experience and other assumptions that we believe are reasonable.

We test goodwill and indefinite-lived intangible assets for impairment at least annually in the second quarter or when a triggering event occurs.

If the carrying value of a reporting unit’s net assets exceeds its fair value, the second step would be applied to measure the difference between the carrying value and implied fair value of goodwill.

If the carrying value of goodwill exceeds its implied fair value, the goodwill would be considered impaired and would be reduced to its implied fair value.

If the carrying value exceeds fair value, the intangible asset would be considered impaired and would be reduced to fair value.

Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to an impairment risk if business operating results or macroeconomic conditions deteriorate.

We recognize revenues when title and risk of loss pass to our customers.

We record revenues net of consumer incentives and trade promotions and include all shipping and handling charges billed to customers.

We recorded advertising expenses of $629 million in 2017, $708 million in 2016, and $464 million in 2015.

The cost of these plans is charged to expense over the working life of the covered employees.

We generally amortize net actuarial gains or losses in future periods within cost of products sold and SG&A.

For additional information on derivative activity within our operating results, see Note 11, Financial Instruments.

Any hedging ineffectiveness is recognized in net earnings when the change in the value of the hedge does not offset the change in the value of the underlying hedged item.

When we use financial instruments, we are exposed to credit risk that a counterparty might fail to fulfill its performance obligations under the terms of our agreement.

We minimize our credit risk by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure we have with each counterparty, and monitoring the financial condition of our counterparties.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, [added: has] evaluated the effectiveness of our disclosure controls and procedures [removed: as of] [added: (as defined in Rules 13a-15(e) and 15d-15(e) under] the [removed: end] [added: Exchange Act) as] of [removed: the period covered by this report.][added: December 29, 2018.]

Based on that evaluation, [removed: the] [added: our] Chief Executive Officer and Chief Financial Officer [added: have] concluded that [added: as of December 29, 2018, due to the existence of the material weaknesses in] our [added: internal control over financial reporting described below, our] disclosure controls and [removed: procedures, as of December 30, 2017,] [added: procedures] were [added: not] effective [removed: and provided] [added: to provide] reasonable assurance that the information required to be disclosed [removed: by us] in [added: the] reports [removed: filed] [added: that we file] or [removed: submitted] [added: submit] under the [removed: Securities] Exchange Act [removed: of 1934] is [removed: (i)] recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and [removed: (ii)] [added: that such information is] accumulated and communicated to [removed: our management, including the Chief Executive Officer and Chief Financial Officer,] [added: management] as appropriate to allow timely decisions regarding required disclosure.

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 [removed: the Company's] [added: our] annual or interim financial statements will not be prevented or detected on a timely basis.

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 ended December [removed: 30, 2017.][added: 29, 2018.]

We determined [removed: that, except for the remediation activities described above,] [added: that] there were no changes in our internal control over financial reporting during the three months ended December [removed: 30, 2017] [added: 29, 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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 [removed: reporting] purposes in accordance with generally accepted accounting principles.

| • | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, [removed: use] [added: use,] or disposition of assets that could have a material effect on the consolidated financial statements. |

[removed: Management] [added: 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 [removed: this assessment] on [removed: criteria] [added: the framework] described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

PricewaterhouseCoopers LLP, an independent registered public accounting [removed: firm, who] [added: 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 [removed: 30, 2017,] [added: 29, 2018,] as stated in their report which appears herein under Item [removed: 8.][added: 8, Financial Statements and Supplementary Data.]

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.

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.

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.

Remediation of Previously Disclosed Material Weakness

As previously disclosed concurrently with the filing of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, we concluded that we had a material weakness in internal control over financial reporting related to the misapplication of Accounting Standards Update 2016-15.

Specifically, we did not maintain effective controls over the adoption of new accounting standards, including communication with the appropriate individuals in coming to our conclusions on the application of new standards.

Our management determined that the control deficiency constituted a material weakness.

During the fourth quarter of 2017, management implemented steps to improve the evaluation and documentation of new accounting standards’ impacts and communication with the appropriate individuals.

During the three months ended December 30, 2017, management implemented steps to improve the evaluation and documentation of new accounting standards’ impacts and communication with the appropriate individuals.

These changes have been designed to ensure enhanced subject matter expert input in relation to new accounting standard pronouncements.

Management assessed the effectiveness of our internal control over financial reporting as of December 30, 2017.

Based on this assessment, management determined that as of December 30, 2017, we maintained effective internal control over financial reporting.

The information on our Web site is not, and [removed: shall] [added: will] not be deemed to be, a part of this Annual Report on Form 10-K or incorporated [added: by reference] into any [added: of our] other filings [removed: we make] with the SEC.

EXECUTIVE OFFICERS

Information regarding executive officers is included in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.”

BOARD OF DIRECTORS

Directors and Director Nominees

The table below provides summary information about each director and each person nominated by the Kraft Heinz Board of Directors (the “Board”) for election at our 2019 Annual Meeting of Stockholders (the “Annual Meeting”) as of June 5, 2019.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| 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 | | | | | | | | |

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| --- | --- |

| * | 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. |

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| --- | --- |

| | 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.

We have a written code of conduct that applies to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.

Our code of conduct is available free of charge on our website at www.kraftheinzcompany.com and will be provided free of charge to any shareholder submitting a written request to: Corporate Secretary, 200 East Randolph Street, Suite 7600; Chicago, Illinois 60601.

Any amendment to our code of conduct and any waiver applicable to our executive officers or senior financial officers will be posted on our Web site within the time period required by the SEC and applicable NASDAQ rules.

Additional information required by this Item 10 is included under the headings “Company Proposals - Proposal 1.

Election of Directors,” “Corporate Governance and Board Matters – Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance and Board Matters – Governance Guidelines and Codes of Conduct,” and “Board Committees and Membership – Audit Committee” in our definitive Proxy Statement for our Annual Meeting of Shareholders scheduled to be held on April 23, 2018 (“2018 Proxy Statement”).

This information is incorporated by reference into this Annual Report on Form 10-K.