x
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of incorporation or organization)
|
|
46-2078182
(I.R.S. Employer Identification No.)
|
One PPG Place, Pittsburgh, Pennsylvania
(Address of Principal Executive Offices)
|
|
15222
(Zip Code)
|
Title of each class
|
|
Name of exchange on which registered
|
Common stock, $0.01 par value
|
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
x
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|||
Condiments and sauces
|
25
|
%
|
|
24
|
%
|
|
32
|
%
|
Cheese and dairy
|
21
|
%
|
|
21
|
%
|
|
15
|
%
|
Ambient meals
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
Frozen and chilled meals
|
10
|
%
|
|
10
|
%
|
|
12
|
%
|
Meats and seafood
|
10
|
%
|
|
10
|
%
|
|
8
|
%
|
|
|
Majority Owned and Licensed Trademarks
|
United States
|
|
Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Planters, Maxwell House, Capri Sun*, Ore-Ida, Kool-Aid, Jell-O
|
Canada
|
|
Kraft, Heinz, Philadelphia, Cracker Barrel, P’Tit Cheese, Maxwell House, Tassimo*, Classico
|
Europe
|
|
Heinz, Plasmon, Pudliszki, Honig, HP, Benedicta
|
Rest of World
|
|
Heinz, ABC, Master, Quero, Golden Circle, Kraft, Wattie's, Glucon D, Complan
|
•
|
growth through product improvements and renovation, innovation, and line extensions,
|
•
|
uncompromising product safety and quality,
|
•
|
superior customer satisfaction, and
|
•
|
cost reduction.
|
Name
|
|
Age
|
|
Title
|
Bernardo Hees
|
|
48
|
|
Chief Executive Officer
|
David Knopf
|
|
29
|
|
Executive Vice President and Chief Financial Officer
|
Paulo Basilio
|
|
43
|
|
President of U.S. Commercial Business
|
Pedro Drevon
|
|
35
|
|
Zone President of Latin America
|
Rashida La Lande
|
|
44
|
|
Senior Vice President, Global General Counsel and Corporate Secretary
|
Rafael Oliveira
|
|
43
|
|
Zone President of EMEA
|
Eduardo Pelleissone
|
|
44
|
|
Executive Vice President of Global Operations
|
Carlos Piani
|
|
44
|
|
Zone President of Canada
|
Rodrigo Wickbold
|
|
41
|
|
Zone President of APAC
|
•
|
compliance with U.S. laws affecting operations outside of the United States, including anti-bribery laws such as the FCPA;
|
•
|
changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or their interpretation, or tax audit implications;
|
•
|
the imposition of increased or new tariffs, quotas, trade barriers or similar restrictions on our sales or regulations, taxes or policies that might negatively affect our sales;
|
•
|
currency devaluations or fluctuations in currency values;
|
•
|
compliance with antitrust and competition laws, data privacy laws, and a variety of other local, national and multi-national regulations and laws in multiple jurisdictions;
|
•
|
discriminatory or conflicting fiscal policies in or across foreign jurisdictions;
|
•
|
changes in capital controls, including currency exchange controls, government currency policies or other limits on our ability to import raw materials or finished product into various countries or repatriate cash from outside the United States;
|
•
|
challenges associated with cross-border product distribution;
|
•
|
changes in local regulations and laws, the uncertainty of enforcement of remedies in foreign jurisdictions, and foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources;
|
•
|
risks and costs associated with political and economic instability, corruption, anti-American sentiment and social and ethnic unrest in the countries in which we operate;
|
•
|
the risks of operating in developing or emerging markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations and the enforceability of contract rights and intellectual property rights;
|
•
|
risks arising from the significant and rapid fluctuations in currency exchange markets and the decisions and positions that we take to hedge such volatility;
|
•
|
changing labor conditions and difficulties in staffing our operations;
|
•
|
greater risk of uncollectible accounts and longer collection cycles; and
|
•
|
design, implementation and use of effective control environment processes across our diverse operations and employee base.
|
•
|
increasing our vulnerability to general adverse economic and industry conditions;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, research and development, debt service requirements, acquisitions, and general corporate or other purposes;
|
•
|
resulting in a downgrade to our credit rating, which could adversely affect our cost of funds, liquidity, and access to capital markets;
|
•
|
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
|
limiting our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors who are not as highly leveraged;
|
•
|
making it more difficult for us to make payments on our existing indebtedness;
|
•
|
requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;
|
•
|
exposing us to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world and substantially all of our debt is denominated in U.S. dollars; and
|
•
|
in the case of any additional indebtedness, exacerbating the risks associated with our substantial financial leverage.
|
|
Owned
|
|
Leased
|
United States
|
41
|
|
1
|
Canada
|
2
|
|
—
|
Europe
|
11
|
|
—
|
Rest of World
|
26
|
|
2
|
|
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
|
|
|
Kraft Heinz
|
|
S&P 500
|
|
S&P Consumer Staples Food Products
|
||||||
July 6, 2015
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
December 31, 2015
|
102.07
|
|
|
99.85
|
|
|
107.48
|
|
|||
December 30, 2016
|
125.99
|
|
|
111.79
|
|
|
117.49
|
|
|||
December 29, 2017
|
115.44
|
|
|
136.20
|
|
|
118.95
|
|
|
|
Total Number
of Shares
(a)
|
|
Average Price
Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(b)
|
|
Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
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
|
|
|
|
|
—
|
|
|
|
(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 RSUs, and (3) shares repurchased related to employee benefit programs (including our annual bonus swap program) or to offset the dilutive effect of equity issuances.
|
(b)
|
We do not have any publicly announced share repurchase plans or programs.
|
•
|
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 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 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”).
|
|
Successor
|
|
Predecessor
(H. J. Heinz Company)
|
||||||||||||||||||||||||
|
December 30,
2017
(52 weeks)
|
|
December 31,
2016 (52 weeks) (a) |
|
January 3,
2016 (53 weeks) |
|
December 28,
2014 (52 weeks) |
|
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)
|
||||||||||||||||||||||||||
Period Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
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
|
|
|||||||
Income/(loss) from continuing operations per common share
(b)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
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
|
|
|||||||
Redeemable preferred stock
|
—
|
|
|
—
|
|
|
8,320
|
|
|
8,320
|
|
|
8,320
|
|
|
NA
|
|
|
—
|
|
|||||||
Cash dividends per common share
|
2.45
|
|
|
2.35
|
|
|
1.70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.06
|
|
(a)
|
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 includes a 53rd week of activity.
|
(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.
|
(d)
|
The increases in net sales, total assets, and long-term debt from December 28, 2014 to January 3, 2016 reflect the impact of the 2015 Merger. See Note 2,
Merger and Acquisition
, to the consolidated financial statements for additional information.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions, except per share data)
|
|
|
|
(in millions, except per share data)
|
|
|
||||||||||||||
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
|
%
|
||||
Net income/(loss) attributable to common shareholders
|
10,999
|
|
|
3,452
|
|
|
218.6
|
%
|
|
3,452
|
|
|
(266
|
)
|
|
nm
|
|
||||
Diluted earnings/(loss) per share
|
8.95
|
|
|
2.81
|
|
|
218.5
|
%
|
|
2.81
|
|
|
(0.34
|
)
|
|
nm
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
(1.0
|
)%
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
|
44.4
|
%
|
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.
|
(b)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Operating income
|
$
|
6,773
|
|
|
$
|
6,142
|
|
|
10.3
|
%
|
|
$
|
6,142
|
|
|
$
|
2,639
|
|
|
132.7
|
%
|
Net income/(loss) attributable to common shareholders
|
10,999
|
|
|
3,452
|
|
|
218.6
|
%
|
|
3,452
|
|
|
(266
|
)
|
|
nm
|
|
||||
Adjusted EBITDA
(a)
|
7,930
|
|
|
7,778
|
|
|
1.9
|
%
|
|
7,778
|
|
|
6,739
|
|
|
15.4
|
%
|
(a)
|
Adjusted EBITDA is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
•
|
The effective tax rate was a
98.7%
benefit in 2017 compared to
27.5%
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 the current period. See Note 8,
Income Taxes
, to the consolidated financial statements 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 the prior period. 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 due to 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 an expense of
$9 million
in 2017 compared to income of
$15 million
in 2016. This increase was primarily due to a
$36 million
nonmonetary currency devaluation loss in the current period compared to
$24 million
in the prior period related to our Venezuelan operations. See Note 13,
Venezuela - Foreign Currency and Inflation
, to the consolidated financial statements for additional information.
|
•
|
United States Segment Adjusted EBITDA increased primarily driven by Integration Program savings and lower overhead costs in the current period, partially offset by unfavorable key commodity costs, primarily in dairy, meat, and coffee, and volume/mix declines.
|
•
|
Europe Segment Adjusted EBITDA was flat primarily driven by productivity savings that were offset by higher input costs in local currency and the unfavorable impact of foreign currency (1.6 pp).
|
•
|
Rest of World Segment Adjusted EBITDA decreased primarily due to higher input costs in local currency, increased commercial investments, and the unfavorable impact of foreign currency (3.4 pp), partially offset by Organic Net Sales growth.
|
•
|
Canada Segment Adjusted EBITDA decreased primarily due to a decline in Organic Net Sales, partially offset by Integration Program savings, lower overhead costs in the current period, and the favorable impact of foreign currency (1.7 pp).
|
•
|
Savings from the Integration Program and other restructuring activities and favorable pricing net of key commodity costs in United States and Canada.
|
•
|
Non-cash costs of $347 million relating to the fair value adjustment of Kraft’s inventory in purchase accounting in the prior period.
|
•
|
Series A Preferred Stock dividend cash distributions decreased to
$180 million
in 2016 compared to
$900 million
in 2015. This decrease was primarily due to the redemption of the Series A Preferred Stock on June 7, 2016. In addition, due to the December 8, 2015 common stock dividend declaration, we were required to accelerate payment of the March 7, 2016 preferred dividend to December 8, 2015. This resulted in one Series A Preferred Stock dividend payment in the current period compared to five in the prior period.
|
•
|
Other expense/(income), net improved to income of
$15 million
in 2016, compared to expense of
$305 million
in 2015. The decrease was primarily due to a $234 million nonmonetary currency devaluation loss related to our Venezuelan subsidiary in the prior period and call premiums of $105 million related to our 2015 debt refinancing activities.
|
•
|
Interest expense decreased to
$1.1 billion
in 2016 compared to
$1.3 billion
in 2015. This decrease was primarily due to a $236 million write-off of debt issuance costs related to 2015 debt refinancing activities and a $227 million loss released from accumulated other comprehensive income/(losses) due to the early termination of certain interest rate swaps in the prior period as well as lower interest rates following our debt refinancing in connection with the 2015 Merger. These were partially offset by the assumption of $8.6 billion aggregate principal amount of Kraft’s long-term debt obligations in the 2015 Merger, the issuance of new long-term debt in conjunction with the redemption of our Series A Preferred Stock, and new borrowings under our commercial paper program. See Note 16,
Debt
, and Note 17,
Capital Stock
, to the consolidated financial statements for additional information.
|
•
|
The effective tax rate was
27.5%
in 2016, compared to
36.2%
in 2015. The change in effective tax rate was primarily driven by higher earnings repatriation charges and the nondeductible nonmonetary currency devaluation loss related to our Venezuelan subsidiary in the prior period, partially offset by lower tax benefits associated with taxes on income of foreign subsidiaries, tax exempt income, and deferred tax effects of statutory rate changes in the current period. See Note 8,
Income Taxes
, to the consolidated financial statements for a discussion of effective tax rates.
|
•
|
United States Segment Adjusted EBITDA growth was primarily driven by savings from the Integration Program and favorable pricing net of key commodity costs, partially offset by volume/mix declines and the impact of a 53rd week of shipments (approximately 1.5 pp) in the prior period.
|
•
|
Canada Segment Adjusted EBITDA growth was primarily driven by savings from the Integration Program and favorable pricing net of key commodity costs, partially offset by higher input costs in local currency, unfavorable impact of foreign currency (4.4 pp), and a 53rd week of shipments (approximately 1.5 pp) in the prior period.
|
•
|
Europe Segment Adjusted EBITDA decreased primarily due to unfavorable impact of foreign currency (6.5 pp), lower pricing, impact of a 53rd week of shipments (approximately 1.0 pp) in the prior period as well as an increase in marketing investments, partially offset by savings in manufacturing costs.
|
•
|
Rest of World Segment Adjusted EBITDA decreased due to unfavorable impact of foreign currency (17.4 pp), increased marketing investments, and a 53rd week of shipments (approximately 1.0 pp) in the prior period, partially offset by organic sales growth.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions, except per share data)
|
|
|
|
(in millions, except per share data)
|
|
|
||||||||||||||
Diluted EPS
|
$
|
8.95
|
|
|
$
|
2.81
|
|
|
218.5
|
%
|
|
$
|
2.81
|
|
|
$
|
(0.34
|
)
|
|
nm
|
|
Adjusted EPS
(a)
|
3.55
|
|
|
3.33
|
|
|
6.6
|
%
|
|
3.33
|
|
|
2.19
|
|
|
52.1
|
%
|
(a)
|
Adjusted EPS is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
$ Change
|
|
% Change
|
|||||||
Diluted EPS
|
$
|
8.95
|
|
|
$
|
2.81
|
|
|
$
|
6.14
|
|
|
218.5
|
%
|
Integration and restructuring expenses
|
0.26
|
|
|
0.57
|
|
|
(0.31
|
)
|
|
|
||||
Merger costs
|
—
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
|
||||
Unrealized losses/(gains) on commodity hedges
|
0.01
|
|
|
(0.02
|
)
|
|
0.03
|
|
|
|
||||
Impairment losses
|
0.03
|
|
|
0.03
|
|
|
—
|
|
|
|
||||
Nonmonetary currency devaluation
|
0.03
|
|
|
0.02
|
|
|
0.01
|
|
|
|
||||
Preferred dividend adjustment
|
—
|
|
|
(0.10
|
)
|
|
0.10
|
|
|
|
||||
U.S. Tax Reform
|
(5.73
|
)
|
|
—
|
|
|
(5.73
|
)
|
|
|
||||
Adjusted EPS
(a)
|
$
|
3.55
|
|
|
$
|
3.33
|
|
|
$
|
0.22
|
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Key drivers of change in Adjusted EPS
(a)
:
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
$
|
0.06
|
|
|
|
|||||
Change in preferred dividends
|
|
|
|
|
0.25
|
|
|
|
||||||
Change in interest expense
|
|
|
|
|
(0.06
|
)
|
|
|
||||||
Change in other expense/(income), net
|
|
|
|
|
(0.01
|
)
|
|
|
||||||
Change in effective tax rate and other
|
|
|
|
|
(0.02
|
)
|
|
|
||||||
|
|
|
|
|
$
|
0.22
|
|
|
|
(a)
|
Adjusted EPS is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
$ Change
|
|
% Change
|
|||||||
Diluted EPS
|
$
|
2.81
|
|
|
$
|
(0.34
|
)
|
|
$
|
3.15
|
|
|
nm
|
|
Pro forma adjustments
(a)
|
—
|
|
|
1.04
|
|
|
(1.04
|
)
|
|
|
||||
Pro forma diluted EPS
|
2.81
|
|
|
0.70
|
|
|
2.11
|
|
|
301.4
|
%
|
|||
Integration and restructuring expenses
|
0.57
|
|
|
0.61
|
|
|
(0.04
|
)
|
|
|
||||
Merger costs
|
0.02
|
|
|
0.49
|
|
|
(0.47
|
)
|
|
|
||||
Unrealized losses/(gains) on commodity hedges
|
(0.02
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
|
||||
Impairment losses
|
0.03
|
|
|
0.03
|
|
|
—
|
|
|
|
||||
Losses/(gains) on sale of business
|
—
|
|
|
(0.01
|
)
|
|
0.01
|
|
|
|
||||
Nonmonetary currency devaluation
|
0.02
|
|
|
0.24
|
|
|
(0.22
|
)
|
|
|
||||
Preferred dividend adjustment
|
(0.10
|
)
|
|
0.15
|
|
|
(0.25
|
)
|
|
|
||||
Adjusted EPS
(c)
|
$
|
3.33
|
|
|
$
|
2.19
|
|
|
$
|
1.14
|
|
|
52.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Key drivers of change in Adjusted EPS
(b)
:
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
$
|
0.77
|
|
|
|
|||||
Change in preferred dividends
|
|
|
|
|
0.34
|
|
|
|
||||||
Change in interest expense
|
|
|
|
|
(0.04
|
)
|
|
|
||||||
Change in other expense/(income), net
|
|
|
|
|
(0.03
|
)
|
|
|
||||||
53rd week of shipments
|
|
|
|
|
(0.03
|
)
|
|
|
||||||
Change in effective tax rate and other
|
|
|
|
|
0.13
|
|
|
|
||||||
|
|
|
|
|
$
|
1.14
|
|
|
|
(a)
|
There were no pro forma adjustments for 2016, as Kraft and Heinz were a combined company for the entire period. See the
Supplemental Unaudited Pro Forma Condensed Combined Financial Information
at the end of this item.
|
(b)
|
Adjusted EPS is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
|
(in millions)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
$
|
10,943
|
|
Canada
|
2,190
|
|
|
2,309
|
|
|
1,437
|
|
|||
Europe
|
2,393
|
|
|
2,366
|
|
|
2,656
|
|
|||
Rest of World
|
3,296
|
|
|
3,171
|
|
|
3,302
|
|
|||
Total net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
|
(in millions)
|
||||||||||
Pro forma net sales
(a)
:
|
|
|
|
|
|
||||||
United States
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
$
|
18,932
|
|
Canada
|
2,190
|
|
|
2,309
|
|
|
2,386
|
|
|||
Europe
|
2,393
|
|
|
2,366
|
|
|
2,657
|
|
|||
Rest of World
|
3,296
|
|
|
3,171
|
|
|
3,472
|
|
|||
Total pro forma net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
27,447
|
|
(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.
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||||
|
(in millions)
|
||||||||||||||
Organic Net Sales
(a)
:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
$
|
18,641
|
|
|
$
|
18,699
|
|
Canada
|
2,148
|
|
|
2,309
|
|
|
2,393
|
|
|
2,359
|
|
||||
Europe
|
2,385
|
|
|
2,366
|
|
|
2,520
|
|
|
2,588
|
|
||||
Rest of World
|
3,283
|
|
|
3,116
|
|
|
3,263
|
|
|
3,082
|
|
||||
Total Organic Net Sales
|
$
|
26,169
|
|
|
$
|
26,432
|
|
|
$
|
26,817
|
|
|
$
|
26,728
|
|
(a)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
Pro Forma Net Sales
(a)
|
|
Impact of Currency
|
|
Impact of Divestitures
|
|
Impact of 53rd Week
|
|
Organic Net Sales
|
|
Price
|
|
Volume/Mix
|
||
2017 Compared to 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
(1.5
|
)%
|
|
0.0 pp
|
|
0.0 pp
|
|
0.0 pp
|
|
(1.5
|
)%
|
|
0.4 pp
|
|
(1.9) pp
|
Canada
|
(5.2
|
)%
|
|
1.8 pp
|
|
0.0 pp
|
|
0.0 pp
|
|
(7.0
|
)%
|
|
(1.7) pp
|
|
(5.3) pp
|
Europe
|
1.1
|
%
|
|
0.3 pp
|
|
0.0 pp
|
|
0.0 pp
|
|
0.8
|
%
|
|
(0.9) pp
|
|
1.7 pp
|
Rest of World
|
3.9
|
%
|
|
(1.5) pp
|
|
0.0 pp
|
|
0.0 pp
|
|
5.4
|
%
|
|
4.6 pp
|
|
0.8 pp
|
Kraft Heinz
|
(1.0
|
)%
|
|
0.0 pp
|
|
0.0 pp
|
|
0.0 pp
|
|
(1.0
|
)%
|
|
0.5 pp
|
|
(1.5) pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2016 Compared to 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
(1.5
|
)%
|
|
0.0 pp
|
|
0.0 pp
|
|
(1.2) pp
|
|
(0.3
|
)%
|
|
0.2 pp
|
|
(0.5) pp
|
Canada
|
(3.2
|
)%
|
|
(3.5) pp
|
|
0.0 pp
|
|
(1.1) pp
|
|
1.4
|
%
|
|
0.6 pp
|
|
0.8 pp
|
Europe
|
(11.0
|
)%
|
|
(5.8) pp
|
|
(1.6) pp
|
|
(1.0) pp
|
|
(2.6
|
)%
|
|
(2.5) pp
|
|
(0.1) pp
|
Rest of World
|
(8.7
|
)%
|
|
(13.2) pp
|
|
0.0 pp
|
|
(1.4) pp
|
|
5.9
|
%
|
|
3.2 pp
|
|
2.7 pp
|
Kraft Heinz
|
(3.5
|
)%
|
|
(2.5) pp
|
|
(0.1) pp
|
|
(1.2) pp
|
|
0.3
|
%
|
|
0.3 pp
|
|
0.0 pp
|
(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.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
|
(in millions)
|
||||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
|
||||||
United States
|
$
|
6,001
|
|
|
$
|
5,862
|
|
|
$
|
4,690
|
|
Canada
|
639
|
|
|
642
|
|
|
541
|
|
|||
Europe
|
781
|
|
|
781
|
|
|
938
|
|
|||
Rest of World
|
617
|
|
|
657
|
|
|
742
|
|
|||
General corporate expenses
|
(108
|
)
|
|
(164
|
)
|
|
(172
|
)
|
|||
Depreciation and amortization (excluding integration and restructuring expenses)
|
(583
|
)
|
|
(536
|
)
|
|
(779
|
)
|
|||
Integration and restructuring expenses
|
(457
|
)
|
|
(1,012
|
)
|
|
(1,117
|
)
|
|||
Merger costs
|
—
|
|
|
(30
|
)
|
|
(194
|
)
|
|||
Amortization of inventory step-up
|
—
|
|
|
—
|
|
|
(347
|
)
|
|||
Unrealized gains/(losses) on commodity hedges
|
(19
|
)
|
|
38
|
|
|
41
|
|
|||
Impairment losses
|
(49
|
)
|
|
(53
|
)
|
|
(58
|
)
|
|||
Gains/(losses) on sale of business
|
—
|
|
|
—
|
|
|
21
|
|
|||
Nonmonetary currency devaluation
|
—
|
|
|
(4
|
)
|
|
(57
|
)
|
|||
Equity award compensation expense (excluding integration and restructuring expenses)
|
(49
|
)
|
|
(39
|
)
|
|
(61
|
)
|
|||
Other pro forma adjustments
|
—
|
|
|
—
|
|
|
(1,549
|
)
|
|||
Operating income
|
6,773
|
|
|
6,142
|
|
|
2,639
|
|
|||
Interest expense
|
1,234
|
|
|
1,134
|
|
|
1,321
|
|
|||
Other expense/(income), net
|
9
|
|
|
(15
|
)
|
|
305
|
|
|||
Income/(loss) before income taxes
|
$
|
5,530
|
|
|
$
|
5,023
|
|
|
$
|
1,013
|
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Net sales
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
(1.5
|
)%
|
|
$
|
18,641
|
|
|
$
|
10,943
|
|
|
70.3
|
%
|
Pro forma net sales
(a)
|
18,353
|
|
|
18,641
|
|
|
(1.5
|
)%
|
|
18,641
|
|
|
18,932
|
|
|
(1.5
|
)%
|
||||
Organic Net Sales
(b)
|
18,353
|
|
|
18,641
|
|
|
(1.5
|
)%
|
|
18,641
|
|
|
18,699
|
|
|
(0.3
|
)%
|
||||
Segment Adjusted EBITDA
|
6,001
|
|
|
5,862
|
|
|
2.4
|
%
|
|
5,862
|
|
|
4,690
|
|
|
25.0
|
%
|
(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.
|
(b)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Net sales
|
$
|
2,190
|
|
|
$
|
2,309
|
|
|
(5.2
|
)%
|
|
$
|
2,309
|
|
|
$
|
1,437
|
|
|
60.7
|
%
|
Pro forma net sales
(a)
|
2,190
|
|
|
2,309
|
|
|
(5.2
|
)%
|
|
2,309
|
|
|
2,386
|
|
|
(3.2
|
)%
|
||||
Organic Net Sales
(b)
|
2,148
|
|
|
2,309
|
|
|
(7.0
|
)%
|
|
2,393
|
|
|
2,359
|
|
|
1.4
|
%
|
||||
Segment Adjusted EBITDA
|
639
|
|
|
642
|
|
|
(0.5
|
)%
|
|
642
|
|
|
541
|
|
|
18.7
|
%
|
(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.
|
(b)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Net sales
|
$
|
2,393
|
|
|
$
|
2,366
|
|
|
1.1
|
%
|
|
$
|
2,366
|
|
|
$
|
2,656
|
|
|
(10.9
|
)%
|
Pro forma net sales
(a)
|
2,393
|
|
|
2,366
|
|
|
1.1
|
%
|
|
2,366
|
|
|
2,657
|
|
|
(11.0
|
)%
|
||||
Organic Net Sales
(b)
|
2,385
|
|
|
2,366
|
|
|
0.8
|
%
|
|
2,520
|
|
|
2,588
|
|
|
(2.6
|
)%
|
||||
Segment Adjusted EBITDA
|
781
|
|
|
781
|
|
|
—
|
%
|
|
781
|
|
|
938
|
|
|
(16.7
|
)%
|
(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.
|
(b)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
% Change
|
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
% Change
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Net sales
|
$
|
3,296
|
|
|
$
|
3,171
|
|
|
3.9
|
%
|
|
$
|
3,171
|
|
|
$
|
3,302
|
|
|
(4.0
|
)%
|
Pro forma net sales
(a)
|
3,296
|
|
|
3,171
|
|
|
3.9
|
%
|
|
3,171
|
|
|
3,472
|
|
|
(8.7
|
)%
|
||||
Organic Net Sales
(b)
|
3,283
|
|
|
3,116
|
|
|
5.4
|
%
|
|
3,263
|
|
|
3,082
|
|
|
5.9
|
%
|
||||
Segment Adjusted EBITDA
|
617
|
|
|
657
|
|
|
(6.1
|
)%
|
|
657
|
|
|
742
|
|
|
(11.5
|
)%
|
(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.
|
(b)
|
Organic Net Sales is a non-GAAP financial measure. See the
Non-GAAP Financial Measures
section at the end of this item.
|
|
One-Percentage-Point
|
||||||
|
Increase
|
|
(Decrease)
|
||||
Effect on annual service and interest cost
|
$
|
4
|
|
|
$
|
(3
|
)
|
Effect on postretirement benefit obligation
|
55
|
|
|
(47
|
)
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
100-Basis-Point
|
|
100-Basis-Point
|
||||||||||||
|
Increase
|
|
Decrease
|
|
Increase
|
|
Decrease
|
||||||||
Effect of change in discount rate on pension costs
|
$
|
9
|
|
|
$
|
(19
|
)
|
|
$
|
8
|
|
|
$
|
(21
|
)
|
Effect of change in expected rate of return on plan assets on pension costs
|
(46
|
)
|
|
46
|
|
|
(41
|
)
|
|
41
|
|
||||
Effect of change in discount rate on postretirement costs
|
(4
|
)
|
|
(9
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Effect of change in expected rate of return on plan assets on postretirement costs
|
(11
|
)
|
|
11
|
|
|
—
|
|
|
—
|
|
|
Payments Due
|
|||||||||||||
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
2023 and Thereafter
|
|
Total
|
|||||
Long-term debt
(a)
|
3,939
|
|
|
5,653
|
|
|
6,200
|
|
|
32,779
|
|
|
48,571
|
|
Capital leases
(b)
|
35
|
|
|
34
|
|
|
64
|
|
|
1
|
|
|
134
|
|
Operating leases
(c)
|
103
|
|
|
164
|
|
|
99
|
|
|
165
|
|
|
531
|
|
Purchase obligations
(d)
|
1,558
|
|
|
1,251
|
|
|
446
|
|
|
439
|
|
|
3,694
|
|
Other long-term liabilities
(e)
|
80
|
|
|
106
|
|
|
94
|
|
|
280
|
|
|
560
|
|
Total
|
5,715
|
|
|
7,208
|
|
|
6,903
|
|
|
33,664
|
|
|
53,490
|
|
(a)
|
Amounts represent the expected cash payments of our long-term debt, including interest on variable and fixed rate long-term debt. Interest on variable rate long-term debt is calculated based on interest rates at
December 30, 2017
.
|
(b)
|
Amounts represent the expected cash payments of our capital leases, including expected cash payments of interest expense.
|
(c)
|
Operating leases represent the minimum rental commitments under non-cancelable operating leases.
|
(d)
|
We have purchase obligations for materials, supplies, property, plant and equipment, and co-packing, storage and distribution services based on projected needs to be utilized in the normal course of business. Other purchase obligations include commitments for marketing, advertising, capital expenditures, information technology, and professional services.
Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. A few of these obligations are long-term and are based on minimum purchase requirements. Certain purchase obligations contain variable pricing components, and, as a result, actual cash payments are expected to fluctuate based on changes in these variable components. Due to the proprietary nature of some of our materials and processes, certain supply contracts contain penalty provisions for early terminations. We do not believe that a material amount of penalties is reasonably likely to be incurred under these contracts based upon historical experience and current expectations. We exclude amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities from the table above.
|
(e)
|
Other long-term liabilities primarily consist of estimated payments for the one-time toll charge related to U.S. tax reform, as well as postretirement benefit commitments. Certain other long-term liabilities related to income taxes, insurance accruals, and other accruals included on the consolidated balance sheet are excluded from the above table as we are unable to estimate the timing of payments for these items. Future payments related to other long-term liabilities decreased primarily due to payments of $1.2 billion in 2017 to pre-fund a portion of our U.S. postretirement plan benefits. See Note 10,
Postemployment Benefits
, to the consolidated financial statements for additional information.
|
•
|
Application of the acquisition method of accounting;
|
•
|
The issuance of Heinz common stock to the Sponsors in connection with the equity investments;
|
•
|
The pre-closing Heinz share conversion;
|
•
|
The exchange of one share of Kraft Heinz common stock for each share of Kraft common stock; and
|
•
|
Conformance of accounting policies.
|
|
Kraft Heinz
|
|
Historical Kraft
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||||
Net sales
|
$
|
18,338
|
|
|
$
|
9,109
|
|
|
$
|
—
|
|
|
$
|
27,447
|
|
Cost of products sold
|
12,577
|
|
|
6,103
|
|
|
(381
|
)
|
|
18,299
|
|
||||
Gross profit
|
5,761
|
|
|
3,006
|
|
|
381
|
|
|
9,148
|
|
||||
Selling, general and administrative expenses
|
3,122
|
|
|
1,532
|
|
|
(41
|
)
|
|
4,613
|
|
||||
Operating income
|
2,639
|
|
|
1,474
|
|
|
422
|
|
|
4,535
|
|
||||
Interest expense
|
1,321
|
|
|
247
|
|
|
(40
|
)
|
|
1,528
|
|
||||
Other expense/(income), net
|
305
|
|
|
(16
|
)
|
|
—
|
|
|
289
|
|
||||
Income/(loss) before income taxes
|
1,013
|
|
|
1,243
|
|
|
462
|
|
|
2,718
|
|
||||
Provision for/(benefit from) income taxes
|
366
|
|
|
400
|
|
|
178
|
|
|
944
|
|
||||
Net income/(loss)
|
647
|
|
|
843
|
|
|
284
|
|
|
1,774
|
|
||||
Net income/(loss) attributable to noncontrolling interest
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Net income/(loss) attributable to Kraft Heinz
|
634
|
|
|
843
|
|
|
284
|
|
|
1,761
|
|
||||
Preferred dividends
|
900
|
|
|
—
|
|
|
—
|
|
|
900
|
|
||||
Net income/(loss) attributable to common shareholders
|
$
|
(266
|
)
|
|
$
|
843
|
|
|
$
|
284
|
|
|
$
|
861
|
|
|
|
|
|
|
|
|
|
||||||||
Basic common shares outstanding
|
786
|
|
|
—
|
|
|
416
|
|
|
1,202
|
|
||||
Diluted common shares outstanding
|
786
|
|
|
—
|
|
|
436
|
|
|
1,222
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Per share data applicable to common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic earnings/(loss)
|
$
|
(0.34
|
)
|
|
$
|
—
|
|
|
$
|
1.06
|
|
|
$
|
0.72
|
|
Diluted earnings/(loss)
|
(0.34
|
)
|
|
—
|
|
|
1.04
|
|
|
0.70
|
|
|
January 3,
2016 (53 weeks) |
||
Impact to cost of products sold:
|
|
||
Postemployment benefit costs
(a)
|
$
|
(34
|
)
|
Inventory step-up
(b)
|
(347
|
)
|
|
Impact to cost of products sold
|
$
|
(381
|
)
|
|
|
||
Impact to selling, general and administrative expenses:
|
|
||
Depreciation and amortization
(c)
|
$
|
84
|
|
Compensation expense
(d)
|
31
|
|
|
Postemployment benefit costs
(a)
|
11
|
|
|
Deal costs
(e)
|
(167
|
)
|
|
Impact to selling, general and administrative expenses
|
$
|
(41
|
)
|
|
|
||
Impact to interest expense:
|
|
||
Interest expense
(f)
|
$
|
(40
|
)
|
Impact to interest expense
|
$
|
(40
|
)
|
(a)
|
Represents the change to align Kraft's accounting policy to our accounting policy for postemployment benefit plans. Kraft historically elected a mark-to-market accounting policy and recognized net actuarial gains or losses and changes in the fair value of plan assets immediately in earnings upon remeasurement. Our policy is to initially record such items in other comprehensive income/(loss). Also represents the elimination of Kraft’s historical amortization of postemployment benefit plan prior service credits.
|
(b)
|
Represents the elimination of nonrecurring non-cash costs related to the fair value adjustment of Kraft’s inventory. See Note 2,
Merger and Acquisition
, to the consolidated financial statements for additional information on the determination of fair values.
|
(c)
|
Represents incremental amortization resulting from the fair value adjustment of Kraft’s definite-lived intangible assets in connection with the 2015 Merger. The net change in depreciation expense resulting from the fair value adjustment of property, plant, and equipment was insignificant. See Note 2,
Merger and Acquisition
, to the consolidated financial statements for additional information on the determination of fair values.
|
(d)
|
Represents the incremental compensation expense due to the fair value remeasurement of certain of Kraft’s equity awards in connection with the 2015 Merger. See Note 9,
Employees’ Stock Incentive Plans
, to the consolidated financial statements for additional information on the conversion of Kraft’s equity awards in connection with the 2015 Merger.
|
(e)
|
Represents the elimination of non-recurring deal costs incurred in connection with the 2015 Merger.
|
(f)
|
Represents the incremental change in interest expense resulting from the fair value adjustment of Kraft’s long-term debt in connection with the 2015 Merger, including the elimination of the historical amortization of deferred financing fees and amortization of original issuance discount.
|
|
Net Sales
|
|
Impact of Currency
|
|
Organic Net Sales
|
|
Price
|
|
Volume/Mix
|
||||||
2017 (52 weeks)
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
18,353
|
|
|
$
|
—
|
|
|
$
|
18,353
|
|
|
|
|
|
Canada
|
2,190
|
|
|
42
|
|
|
2,148
|
|
|
|
|
|
|||
Europe
|
2,393
|
|
|
8
|
|
|
2,385
|
|
|
|
|
|
|||
Rest of World
|
3,296
|
|
|
13
|
|
|
3,283
|
|
|
|
|
|
|||
|
$
|
26,232
|
|
|
$
|
63
|
|
|
$
|
26,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2016 (52 weeks)
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
18,641
|
|
|
$
|
—
|
|
|
$
|
18,641
|
|
|
|
|
|
Canada
|
2,309
|
|
|
—
|
|
|
2,309
|
|
|
|
|
|
|||
Europe
|
2,366
|
|
|
—
|
|
|
2,366
|
|
|
|
|
|
|||
Rest of World
|
3,171
|
|
|
55
|
|
|
3,116
|
|
|
|
|
|
|||
|
$
|
26,487
|
|
|
$
|
55
|
|
|
$
|
26,432
|
|
|
|
|
|
|
Pro Forma Net Sales
(a)
|
|
Impact of Currency
|
|
Impact of Divestitures
|
|
Impact of 53rd Week
|
|
Organic Net Sales
|
|
Price
|
|
Volume/Mix
|
||||||||||
2016 (52 weeks)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
18,641
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,641
|
|
|
|
|
|
Canada
|
2,309
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
2,393
|
|
|
|
|
|
|||||
Europe
|
2,366
|
|
|
(154
|
)
|
|
—
|
|
|
—
|
|
|
2,520
|
|
|
|
|
|
|||||
Rest of World
|
3,171
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
3,263
|
|
|
|
|
|
|||||
|
$
|
26,487
|
|
|
$
|
(330
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2015 (53 weeks)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
18,932
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
233
|
|
|
$
|
18,699
|
|
|
|
|
|
Canada
|
2,386
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
2,359
|
|
|
|
|
|
|||||
Europe
|
2,657
|
|
|
—
|
|
|
42
|
|
|
27
|
|
|
2,588
|
|
|
|
|
|
|||||
Rest of World
|
3,472
|
|
|
351
|
|
|
—
|
|
|
39
|
|
|
3,082
|
|
|
|
|
|
|||||
|
$
|
27,447
|
|
|
$
|
351
|
|
|
$
|
42
|
|
|
$
|
326
|
|
|
$
|
26,728
|
|
|
|
|
|
Year-over-year growth rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
(1.5
|
)%
|
|
0.0 pp
|
|
0.0 pp
|
|
(1.2) pp
|
|
(0.3
|
)%
|
|
0.2 pp
|
|
(0.5) pp
|
Canada
|
(3.2
|
)%
|
|
(3.5) pp
|
|
0.0 pp
|
|
(1.1) pp
|
|
1.4
|
%
|
|
0.6 pp
|
|
0.8 pp
|
Europe
|
(11.0
|
)%
|
|
(5.8) pp
|
|
(1.6) pp
|
|
(1.0) pp
|
|
(2.6
|
)%
|
|
(2.5) pp
|
|
(0.1) pp
|
Rest of World
|
(8.7
|
)%
|
|
(13.2) pp
|
|
0.0 pp
|
|
(1.4) pp
|
|
5.9
|
%
|
|
3.2 pp
|
|
2.7 pp
|
Kraft Heinz
|
(3.5
|
)%
|
|
(2.5) pp
|
|
(0.1) pp
|
|
(1.2) pp
|
|
0.3
|
%
|
|
0.3 pp
|
|
0.0 pp
|
(a)
|
There were no pro forma adjustments for 2016, as Kraft and Heinz were a combined company for the entire period. See the
Supplemental Unaudited Pro Forma Condensed Combined Financial Information
at the end of this item.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Pro forma net income/(loss)
(a)
|
$
|
10,990
|
|
|
$
|
3,642
|
|
|
$
|
1,774
|
|
Interest expense
|
1,234
|
|
|
1,134
|
|
|
1,528
|
|
|||
Other expense/(income), net
|
9
|
|
|
(15
|
)
|
|
289
|
|
|||
Provision for/(benefit from) income taxes
|
(5,460
|
)
|
|
1,381
|
|
|
944
|
|
|||
Operating income
|
6,773
|
|
|
6,142
|
|
|
4,535
|
|
|||
Depreciation and amortization (excluding integration and restructuring expenses)
|
583
|
|
|
536
|
|
|
779
|
|
|||
Integration and restructuring expenses
|
457
|
|
|
1,012
|
|
|
1,117
|
|
|||
Merger costs
|
—
|
|
|
30
|
|
|
194
|
|
|||
Unrealized losses/(gains) on commodity hedges
|
19
|
|
|
(38
|
)
|
|
(41
|
)
|
|||
Impairment losses
|
49
|
|
|
53
|
|
|
58
|
|
|||
Losses/(gains) on sale of business
|
—
|
|
|
—
|
|
|
(21
|
)
|
|||
Nonmonetary currency devaluation
|
—
|
|
|
4
|
|
|
57
|
|
|||
Equity award compensation expense (excluding integration and restructuring expenses)
|
49
|
|
|
39
|
|
|
61
|
|
|||
Adjusted EBITDA
|
$
|
7,930
|
|
|
$
|
7,778
|
|
|
$
|
6,739
|
|
(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.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Pro forma diluted EPS
(a)
|
$
|
8.95
|
|
|
$
|
2.81
|
|
|
$
|
0.70
|
|
Integration and restructuring expenses
(b)(c)
|
0.26
|
|
|
0.57
|
|
|
0.61
|
|
|||
Merger costs
(b)(d)
|
—
|
|
|
0.02
|
|
|
0.49
|
|
|||
Unrealized losses/(gains) on commodity hedges
(b)(c)
|
0.01
|
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|||
Impairment losses
(b)(c)
|
0.03
|
|
|
0.03
|
|
|
0.03
|
|
|||
Losses/(gains) on sale of business
(b)(c)
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||
Nonmonetary currency devaluation
(b)(e)
|
0.03
|
|
|
0.02
|
|
|
0.24
|
|
|||
Preferred dividend adjustment
(f)
|
—
|
|
|
(0.10
|
)
|
|
0.15
|
|
|||
U.S. Tax Reform
(g)
|
(5.73
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted EPS
|
$
|
3.55
|
|
|
$
|
3.33
|
|
|
$
|
2.19
|
|
(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.
|
(b)
|
Income tax expense associated with these items is based on applicable jurisdictional tax rates and deductibility assessments of individual items.
|
(c)
|
Refer to the reconciliation of pro forma net income/(loss) to Adjusted EBITDA for the related gross expenses.
|
(d)
|
Merger costs included the following gross expenses:
|
•
|
Expenses recorded in cost of products sold were $2 million in 2016
and $6 million in 2015
(there were no such expenses in 2017)
;
|
•
|
Expenses recorded in SG&A were $28 million in 2016
and $188 million in 2015
(there were no such expenses in 2017)
;
|
•
|
Expenses recorded in interest expense were $466 million in 2015 (there were no such expenses in 2017 or 2016); and,
|
•
|
Expenses recorded in other expense/(income), net, were $144 million in 2015 (there were no such expenses in 2017 or 2016).
|
(e)
|
Nonmonetary currency devaluation included the following gross expenses:
|
•
|
Expenses recorded in cost of products sold were $4 million in 2016
and $57 million in 2015
(there were no such expenses in 2017); and
|
•
|
Expenses recorded in other expense/(income), net, were $36 million in 2017
,
$24 million in 2016
, and $234 million in 2015.
|
(f)
|
For Adjusted EPS, we present the impact of the Series A Preferred Stock dividend payments on an accrual basis. Accordingly, we included adjustments to EPS to exclude $180 million of Series A Preferred Stock dividends from the fourth quarter of 2015 (to reflect the March 7, 2016 Series A Preferred Stock dividend that was paid in December 2015), to include such $180 million Series A Preferred Stock dividend payment in the first quarter of 2016, and to exclude $51 million of Series A Preferred Stock dividends from the second quarter of 2016 (to reflect that it was redeemed on June 7, 2016).
|
(g)
|
U.S. Tax Reform included a tax benefit of $7.0 billion in 2017 related to enactment of the Tax Cuts and Jobs Act by the U.S. government on December 22, 2017. There were no such expenses in 2016
or 2015. See
Overview
at the beginning of this item for additional information.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
||||
Commodity contracts
|
$
|
23
|
|
|
$
|
39
|
|
Foreign currency contracts
|
173
|
|
|
179
|
|
||
Cross-currency swap contracts
|
287
|
|
|
306
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
Cost of products sold
|
16,529
|
|
|
16,901
|
|
|
12,577
|
|
|||
Gross profit
|
9,703
|
|
|
9,586
|
|
|
5,761
|
|
|||
Selling, general and administrative expenses
|
2,930
|
|
|
3,444
|
|
|
3,122
|
|
|||
Operating income
|
6,773
|
|
|
6,142
|
|
|
2,639
|
|
|||
Interest expense
|
1,234
|
|
|
1,134
|
|
|
1,321
|
|
|||
Other expense/(income), net
|
9
|
|
|
(15
|
)
|
|
305
|
|
|||
Income/(loss) before income taxes
|
5,530
|
|
|
5,023
|
|
|
1,013
|
|
|||
Provision for/(benefit from) income taxes
|
(5,460
|
)
|
|
1,381
|
|
|
366
|
|
|||
Net income/(loss)
|
10,990
|
|
|
3,642
|
|
|
647
|
|
|||
Net income/(loss) attributable to noncontrolling interest
|
(9
|
)
|
|
10
|
|
|
13
|
|
|||
Net income/(loss) attributable to Kraft Heinz
|
10,999
|
|
|
3,632
|
|
|
634
|
|
|||
Preferred dividends
|
—
|
|
|
180
|
|
|
900
|
|
|||
Net income/(loss) attributable to common shareholders
|
$
|
10,999
|
|
|
$
|
3,452
|
|
|
$
|
(266
|
)
|
Per share data applicable to common shareholders:
|
|
|
|
|
|
||||||
Basic earnings/(loss)
|
$
|
9.03
|
|
|
$
|
2.84
|
|
|
$
|
(0.34
|
)
|
Diluted earnings/(loss)
|
8.95
|
|
|
2.81
|
|
|
(0.34
|
)
|
|||
Dividends declared
|
2.45
|
|
|
2.35
|
|
|
1.70
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Net income/(loss)
|
$
|
10,990
|
|
|
$
|
3,642
|
|
|
$
|
647
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
1,184
|
|
|
(986
|
)
|
|
(1,604
|
)
|
|||
Net deferred gains/(losses) on net investment hedges
|
(353
|
)
|
|
226
|
|
|
506
|
|
|||
Net actuarial gains/(losses) arising during the period
|
69
|
|
|
(40
|
)
|
|
23
|
|
|||
Prior service credits/(costs) arising during the period
|
17
|
|
|
97
|
|
|
923
|
|
|||
Reclassification of net postemployment benefit losses/(gains)
|
(309
|
)
|
|
(207
|
)
|
|
(85
|
)
|
|||
Net deferred gains/(losses) on cash flow hedges
|
(113
|
)
|
|
46
|
|
|
(6
|
)
|
|||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
85
|
|
|
(87
|
)
|
|
120
|
|
|||
Total other comprehensive income/(loss)
|
580
|
|
|
(951
|
)
|
|
(123
|
)
|
|||
Total comprehensive income/(loss)
|
11,570
|
|
|
2,691
|
|
|
524
|
|
|||
Comprehensive income/(loss) attributable to noncontrolling interest
|
(3
|
)
|
|
16
|
|
|
(13
|
)
|
|||
Comprehensive income/(loss) attributable to Kraft Heinz
|
$
|
11,573
|
|
|
$
|
2,675
|
|
|
$
|
537
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,629
|
|
|
$
|
4,204
|
|
Trade receivables (net of allowances of $23 at December 30, 2017 and $20 at December 31, 2016)
|
921
|
|
|
769
|
|
||
Sold receivables
|
353
|
|
|
129
|
|
||
Income taxes receivable
|
582
|
|
|
260
|
|
||
Inventories
|
2,815
|
|
|
2,684
|
|
||
Other current assets
|
966
|
|
|
707
|
|
||
Total current assets
|
7,266
|
|
|
8,753
|
|
||
Property, plant and equipment, net
|
7,120
|
|
|
6,688
|
|
||
Goodwill
|
44,824
|
|
|
44,125
|
|
||
Intangible assets, net
|
59,449
|
|
|
59,297
|
|
||
Other assets
|
1,573
|
|
|
1,617
|
|
||
TOTAL ASSETS
|
$
|
120,232
|
|
|
$
|
120,480
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Commercial paper and other short-term debt
|
$
|
460
|
|
|
$
|
645
|
|
Current portion of long-term debt
|
2,743
|
|
|
2,046
|
|
||
Trade payables
|
4,449
|
|
|
3,996
|
|
||
Accrued marketing
|
680
|
|
|
749
|
|
||
Accrued postemployment costs
|
51
|
|
|
157
|
|
||
Income taxes payable
|
152
|
|
|
255
|
|
||
Interest payable
|
419
|
|
|
415
|
|
||
Other current liabilities
|
1,178
|
|
|
1,238
|
|
||
Total current liabilities
|
10,132
|
|
|
9,501
|
|
||
Long-term debt
|
28,333
|
|
|
29,713
|
|
||
Deferred income taxes
|
14,076
|
|
|
20,848
|
|
||
Accrued postemployment costs
|
427
|
|
|
2,038
|
|
||
Other liabilities
|
1,017
|
|
|
806
|
|
||
TOTAL LIABILITIES
|
53,985
|
|
|
62,906
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
||||
Redeemable noncontrolling interest
|
6
|
|
|
—
|
|
||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value (5,000 shares authorized; 1,221 shares issued and 1,219
shares outstanding at December 30, 2017; 1,219 shares issued and 1,217 shares outstanding at December 31, 2016)
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
58,711
|
|
|
58,593
|
|
||
Retained earnings/(deficit)
|
8,589
|
|
|
588
|
|
||
Accumulated other comprehensive income/(losses)
|
(1,054
|
)
|
|
(1,628
|
)
|
||
Treasury stock, at cost (2 shares at December 30, 2017 and 2 shares at December 31, 2016)
|
(224
|
)
|
|
(207
|
)
|
||
Total shareholders' equity
|
66,034
|
|
|
57,358
|
|
||
Noncontrolling interest
|
207
|
|
|
216
|
|
||
TOTAL EQUITY
|
66,241
|
|
|
57,574
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
120,232
|
|
|
$
|
120,480
|
|
|
Common Stock
|
|
Warrants
|
|
Additional Paid-in Capital
|
|
Retained Earnings/(Deficit)
|
|
Accumulated Other Comprehensive Income/(Losses)
|
|
Treasury Stock
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||||
Balance at December 28, 2014
|
$
|
4
|
|
|
$
|
367
|
|
|
$
|
7,320
|
|
|
$
|
—
|
|
|
$
|
(574
|
)
|
|
$
|
—
|
|
|
$
|
219
|
|
|
$
|
7,336
|
|
Net income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
647
|
|
||||||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(18
|
)
|
|
(115
|
)
|
||||||||
Dividends declared-Series A Preferred Stock
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
(540
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(900
|
)
|
||||||||
Dividends declared-common stock
|
—
|
|
|
—
|
|
|
(1,972
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,064
|
)
|
||||||||
Dividends declared-noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||||
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
|
|
||||||||
Exercise of stock options, issuance of other stock awards, and other
|
—
|
|
|
—
|
|
|
173
|
|
|
(2
|
)
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
140
|
|
||||||||
Balance at January 3, 2016
|
12
|
|
|
—
|
|
|
58,375
|
|
|
—
|
|
|
(671
|
)
|
|
(31
|
)
|
|
208
|
|
|
57,893
|
|
||||||||
Net income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
3,632
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
3,642
|
|
||||||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(957
|
)
|
|
—
|
|
|
6
|
|
|
(951
|
)
|
||||||||
Dividends declared-Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
||||||||
Dividends declared-common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,862
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,862
|
)
|
||||||||
Dividends declared-noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Exercise of stock options, issuance of other stock awards, and other
|
—
|
|
|
—
|
|
|
218
|
|
|
(2
|
)
|
|
—
|
|
|
(176
|
)
|
|
—
|
|
|
40
|
|
||||||||
Balance at December 31, 2016
|
12
|
|
|
—
|
|
|
58,593
|
|
|
588
|
|
|
(1,628
|
)
|
|
(207
|
)
|
|
216
|
|
|
57,574
|
|
||||||||
Net income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
10,999
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
10,994
|
|
||||||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
574
|
|
|
—
|
|
|
6
|
|
|
580
|
|
||||||||
Dividends declared-common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,988
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,988
|
)
|
||||||||
Dividends declared-noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||||
Exercise of stock options, issuance of other stock awards, and other
|
—
|
|
|
—
|
|
|
118
|
|
|
(10
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
91
|
|
||||||||
Balance at December 30, 2017
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
58,711
|
|
|
$
|
8,589
|
|
|
$
|
(1,054
|
)
|
|
$
|
(224
|
)
|
|
$
|
207
|
|
|
$
|
66,241
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income/(loss)
|
$
|
10,990
|
|
|
$
|
3,642
|
|
|
$
|
647
|
|
Adjustments to reconcile net income/(loss) to operating cash flows:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
1,036
|
|
|
1,337
|
|
|
740
|
|
|||
Amortization of postretirement benefit plans prior service costs/(credits)
|
(328
|
)
|
|
(333
|
)
|
|
(112
|
)
|
|||
Amortization of inventory step-up
|
—
|
|
|
—
|
|
|
347
|
|
|||
Equity award compensation expense
|
46
|
|
|
46
|
|
|
133
|
|
|||
Deferred income tax provision/(benefit)
|
(6,467
|
)
|
|
(29
|
)
|
|
(317
|
)
|
|||
Pension and postretirement benefit plan contributions
|
(1,518
|
)
|
|
(344
|
)
|
|
(286
|
)
|
|||
Impairment losses on indefinite-lived intangible assets
|
49
|
|
|
—
|
|
|
58
|
|
|||
Nonmonetary currency devaluation
|
36
|
|
|
24
|
|
|
234
|
|
|||
Write-off of debt issuance costs
|
2
|
|
|
—
|
|
|
236
|
|
|||
Other items, net
|
76
|
|
|
(134
|
)
|
|
225
|
|
|||
Changes in current assets and liabilities:
|
|
|
|
|
|
||||||
Trade receivables
|
(2,629
|
)
|
|
(2,055
|
)
|
|
(915
|
)
|
|||
Inventories
|
(251
|
)
|
|
(130
|
)
|
|
25
|
|
|||
Accounts payable
|
464
|
|
|
943
|
|
|
(119
|
)
|
|||
Other current assets
|
(67
|
)
|
|
(42
|
)
|
|
114
|
|
|||
Other current liabilities
|
(912
|
)
|
|
(276
|
)
|
|
262
|
|
|||
Net cash provided by/(used for) operating activities
|
527
|
|
|
2,649
|
|
|
1,272
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Cash receipts on sold receivables
|
2,286
|
|
|
2,589
|
|
|
1,331
|
|
|||
Capital expenditures
|
(1,217
|
)
|
|
(1,247
|
)
|
|
(648
|
)
|
|||
Payments to acquire Kraft Foods Group, Inc., net of cash acquired
|
—
|
|
|
—
|
|
|
(9,468
|
)
|
|||
Proceeds from net investment hedges
|
6
|
|
|
91
|
|
|
488
|
|
|||
Other investing activities, net
|
81
|
|
|
19
|
|
|
(12
|
)
|
|||
Net cash provided by/(used for) investing activities
|
1,156
|
|
|
1,452
|
|
|
(8,309
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
(2,644
|
)
|
|
(86
|
)
|
|
(12,314
|
)
|
|||
Proceeds from issuance of long-term debt
|
1,496
|
|
|
6,981
|
|
|
14,834
|
|
|||
Debt prepayment and extinguishment costs
|
—
|
|
|
—
|
|
|
(105
|
)
|
|||
Debt issuance costs
|
(6
|
)
|
|
(53
|
)
|
|
(98
|
)
|
|||
Proceeds from issuance of commercial paper
|
6,043
|
|
|
6,680
|
|
|
—
|
|
|||
Repayments of commercial paper
|
(6,249
|
)
|
|
(6,043
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock to Sponsors
|
—
|
|
|
—
|
|
|
10,000
|
|
|||
Dividends paid-Series A Preferred Stock
|
—
|
|
|
(180
|
)
|
|
(900
|
)
|
|||
Dividends paid-common stock
|
(2,888
|
)
|
|
(3,584
|
)
|
|
(1,302
|
)
|
|||
Redemption of Series A Preferred Stock
|
—
|
|
|
(8,320
|
)
|
|
—
|
|
|||
Other financing activities, net
|
22
|
|
|
(16
|
)
|
|
(68
|
)
|
|||
Net cash provided by/(used for) financing activities
|
(4,226
|
)
|
|
(4,621
|
)
|
|
10,047
|
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
57
|
|
|
(137
|
)
|
|
(408
|
)
|
|||
Cash, cash equivalents, and restricted cash
|
|
|
|
|
|
||||||
Net increase/(decrease)
|
(2,486
|
)
|
|
(657
|
)
|
|
2,602
|
|
|||
Balance at beginning of period
|
4,255
|
|
|
4,912
|
|
|
2,310
|
|
|||
Balance at end of period
|
$
|
1,769
|
|
|
$
|
4,255
|
|
|
$
|
4,912
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Non-cash investing activities:
|
|
|
|
|
|
||||||
Beneficial interest obtained in exchange for securitized trade receivables
|
$
|
2,519
|
|
|
$
|
2,213
|
|
|
$
|
1,609
|
|
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
1,269
|
|
|
$
|
1,176
|
|
|
$
|
704
|
|
Income taxes
|
1,206
|
|
|
1,619
|
|
|
577
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Increase/(decrease) to cost of products sold
|
$
|
558
|
|
|
$
|
373
|
|
|
$
|
202
|
|
Increase/(decrease) to selling, general and administrative expenses
|
78
|
|
|
93
|
|
|
(30
|
)
|
|||
Increase/(decrease) to operating income
(a)
|
(636
|
)
|
|
(466
|
)
|
|
(172
|
)
|
(a)
|
Includes amortization of prior service costs/(credits), curtailments, special/contractual termination benefits, and certain settlements. These components of net pension and postretirement cost/(benefit) are excluded from Segment Adjusted EBITDA and totaled approximately
$(480) million
in 2017,
$(340) million
in 2016, and
$(120) million
in 2015.
|
•
|
Grants the ability to hedge the risk associated with the change in a contractually specified component of the purchase or sale of a non-financial item instead of the total contractual price, which could allow more commodity contracts to qualify for hedge accounting;
|
•
|
Requires us to defer the entire change in value of the derivative, including the effective and ineffective portion, into other comprehensive income until the hedged item impacts net income. When released, the deferred hedge gains and losses, including the ineffective portion, will be recognized in the same statement of income line affected by the hedged item;
|
•
|
Allows us to recognize changes in the fair value of excluded components in other comprehensive income (which will be amortized into net income over the life of the derivative) or in net income in the related period;
|
•
|
Changes hedge effectiveness testing, including timing and allowable methods of testing; and,
|
•
|
Requires additional tabular disclosures in the footnotes to the financial statements.
|
Aggregate fair value of Kraft common stock
|
$
|
42,502
|
|
$16.50 per share special cash dividend
|
9,782
|
|
|
Fair value of replacement equity awards
|
353
|
|
|
Total consideration exchanged
|
$
|
52,637
|
|
Cash
|
$
|
314
|
|
Other current assets
|
3,423
|
|
|
Property, plant and equipment
|
4,179
|
|
|
Identifiable intangible assets
|
47,771
|
|
|
Other non-current assets
|
214
|
|
|
Trade and other payables
|
(3,026
|
)
|
|
Long-term debt
|
(9,286
|
)
|
|
Net postemployment benefits and other non-current liabilities
|
(4,739
|
)
|
|
Deferred income tax liabilities
|
(16,675
|
)
|
|
Net assets acquired
|
22,175
|
|
|
Goodwill on acquisition
|
30,462
|
|
|
Total consideration
|
52,637
|
|
|
Fair value of shares exchanged and equity awards
|
42,855
|
|
|
Total cash consideration paid to Kraft shareholders
|
9,782
|
|
|
Cash and cash equivalents of Kraft at the 2015 Merger Date
|
314
|
|
|
Acquisition of business, net of cash on hand
|
$
|
9,468
|
|
|
Fair Value
|
|
Weighted Average Life
|
||
|
(in millions of dollars)
|
|
(in years)
|
||
Indefinite-lived trademarks
|
$
|
43,104
|
|
|
|
Definite-lived trademarks
|
1,690
|
|
|
24
|
|
Customer-related assets
|
2,977
|
|
|
29
|
|
Total
|
$
|
47,771
|
|
|
|
|
January 3,
2016 (53 weeks) |
||
Net sales
|
$
|
27,447
|
|
Net income
|
1,761
|
|
|
Basic earnings per share
|
0.72
|
|
|
Diluted earnings per share
|
0.70
|
|
•
|
Organization costs (approximately
$400 million
) associated with streamlining and simplifying our operating structure, resulting in workforce reduction (primarily severance and employee benefit costs).
|
•
|
Footprint costs (approximately
$1.3 billion
) associated with optimizing our production and supply chain network, resulting in workforce reduction and facility closures and consolidations (primarily asset-related costs and severance and employee benefit costs).
|
•
|
Other costs (approximately
$400 million
) incurred as a direct result of integration activities, including other exit costs (primarily lease and contract terminations) and other implementation costs (primarily professional services and other third-party fees).
|
|
Severance and Employee Benefit Costs
|
|
Other Exit Costs
(a)
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
99
|
|
|
$
|
10
|
|
|
$
|
109
|
|
Charges/(credits)
|
(142
|
)
|
|
13
|
|
|
(129
|
)
|
|||
Cash payments
|
(70
|
)
|
|
(7
|
)
|
|
(77
|
)
|
|||
Non-cash utilization
|
137
|
|
|
6
|
|
|
143
|
|
|||
Balance at December 30, 2017
|
$
|
24
|
|
|
$
|
22
|
|
|
$
|
46
|
|
|
Severance and Employee Benefit Costs
|
|
Other Exit Costs
(a)
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
12
|
|
|
$
|
25
|
|
|
$
|
37
|
|
Charges/(credits)
|
50
|
|
|
10
|
|
|
60
|
|
|||
Cash payments
|
(38
|
)
|
|
(9
|
)
|
|
(47
|
)
|
|||
Non-cash utilization
|
(8
|
)
|
|
(1
|
)
|
|
(9
|
)
|
|||
Balance at December 30, 2017
|
$
|
16
|
|
|
$
|
25
|
|
|
$
|
41
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Severance and employee benefit costs - COGS
|
$
|
(130
|
)
|
|
$
|
53
|
|
|
$
|
119
|
|
Severance and employee benefit costs - SG&A
|
38
|
|
|
104
|
|
|
519
|
|
|||
Asset-related costs - COGS
|
190
|
|
|
496
|
|
|
186
|
|
|||
Asset-related costs - SG&A
|
28
|
|
|
41
|
|
|
7
|
|
|||
Other costs - COGS
|
264
|
|
|
162
|
|
|
99
|
|
|||
Other costs - SG&A
|
67
|
|
|
156
|
|
|
93
|
|
|||
|
$
|
457
|
|
|
$
|
1,012
|
|
|
$
|
1,023
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
United States
|
$
|
292
|
|
|
$
|
759
|
|
|
$
|
790
|
|
Canada
|
34
|
|
|
45
|
|
|
47
|
|
|||
Europe
|
54
|
|
|
85
|
|
|
142
|
|
|||
Rest of World
|
14
|
|
|
6
|
|
|
12
|
|
|||
General corporate expenses
|
63
|
|
|
117
|
|
|
32
|
|
|||
|
$
|
457
|
|
|
$
|
1,012
|
|
|
$
|
1,023
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
1,629
|
|
|
$
|
4,204
|
|
Restricted cash included in other assets (current)
|
140
|
|
|
42
|
|
||
Restricted cash included in other assets (noncurrent)
|
—
|
|
|
9
|
|
||
Cash, cash equivalents, and restricted cash
|
$
|
1,769
|
|
|
$
|
4,255
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Packaging and ingredients
|
$
|
560
|
|
|
$
|
542
|
|
Work in process
|
439
|
|
|
388
|
|
||
Finished product
|
1,816
|
|
|
1,754
|
|
||
Inventories
|
$
|
2,815
|
|
|
$
|
2,684
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Land
|
$
|
250
|
|
|
$
|
264
|
|
Buildings and improvements
|
2,232
|
|
|
1,884
|
|
||
Equipment and other
|
5,364
|
|
|
4,770
|
|
||
Construction in progress
|
1,368
|
|
|
1,600
|
|
||
|
9,214
|
|
|
8,518
|
|
||
Accumulated depreciation
|
(2,094
|
)
|
|
(1,830
|
)
|
||
Property, plant and equipment, net
|
$
|
7,120
|
|
|
$
|
6,688
|
|
|
United States
|
|
Canada
|
|
Europe
|
|
Rest of World
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
33,696
|
|
|
$
|
4,913
|
|
|
$
|
2,778
|
|
|
$
|
2,738
|
|
|
$
|
44,125
|
|
Translation adjustments and other
|
4
|
|
|
333
|
|
|
281
|
|
|
81
|
|
|
699
|
|
|||||
Balance at December 30, 2017
|
$
|
33,700
|
|
|
$
|
5,246
|
|
|
$
|
3,059
|
|
|
$
|
2,819
|
|
|
$
|
44,824
|
|
Balance at December 31, 2016
|
$
|
53,307
|
|
Translation adjustments
|
397
|
|
|
Impairment losses on indefinite-lived intangible assets
|
(49
|
)
|
|
Balance at December 30, 2017
|
$
|
53,655
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Trademarks
|
$
|
2,386
|
|
|
$
|
(288
|
)
|
|
$
|
2,098
|
|
|
$
|
2,337
|
|
|
$
|
(172
|
)
|
|
$
|
2,165
|
|
Customer-related assets
|
4,231
|
|
|
(544
|
)
|
|
3,687
|
|
|
4,184
|
|
|
(369
|
)
|
|
3,815
|
|
||||||
Other
|
14
|
|
|
(5
|
)
|
|
9
|
|
|
13
|
|
|
(3
|
)
|
|
10
|
|
||||||
|
$
|
6,631
|
|
|
$
|
(837
|
)
|
|
$
|
5,794
|
|
|
$
|
6,534
|
|
|
$
|
(544
|
)
|
|
$
|
5,990
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Income/(loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
3,876
|
|
|
$
|
3,358
|
|
|
$
|
(13
|
)
|
International
|
1,654
|
|
|
1,665
|
|
|
1,026
|
|
|||
Total
|
$
|
5,530
|
|
|
$
|
5,023
|
|
|
$
|
1,013
|
|
|
|
|
|
|
|
||||||
Provision for/(benefit from) income taxes:
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
757
|
|
|
$
|
1,095
|
|
|
$
|
427
|
|
U.S. state and local
|
(46
|
)
|
|
76
|
|
|
22
|
|
|||
International
|
296
|
|
|
239
|
|
|
234
|
|
|||
|
1,007
|
|
|
1,410
|
|
|
683
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
(6,570
|
)
|
|
31
|
|
|
(173
|
)
|
|||
U.S. state and local
|
101
|
|
|
(60
|
)
|
|
(70
|
)
|
|||
International
|
2
|
|
|
—
|
|
|
(74
|
)
|
|||
|
(6,467
|
)
|
|
(29
|
)
|
|
(317
|
)
|
|||
Total provision for/(benefit from) income taxes
|
$
|
(5,460
|
)
|
|
$
|
1,381
|
|
|
$
|
366
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|||
U.S. federal statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase/(decrease) resulting from:
|
|
|
|
|
|
|||
Tax on income of foreign subsidiaries
|
(4.7
|
)%
|
|
(3.6
|
)%
|
|
(11.8
|
)%
|
Domestic manufacturing deduction
|
(1.5
|
)%
|
|
(1.9
|
)%
|
|
(2.9
|
)%
|
U.S. state and local income taxes, net of federal tax benefit
|
1.1
|
%
|
|
0.8
|
%
|
|
(0.6
|
)%
|
Earnings repatriation
|
0.4
|
%
|
|
0.4
|
%
|
|
21.9
|
%
|
Tax exempt income
|
(0.7
|
)%
|
|
(3.3
|
)%
|
|
(10.9
|
)%
|
Deferred tax effect of statutory tax rate changes
|
0.3
|
%
|
|
(2.0
|
)%
|
|
(10.4
|
)%
|
Audit settlements and changes in uncertain tax positions
|
(0.1
|
)%
|
|
1.8
|
%
|
|
6.2
|
%
|
Venezuela nondeductible devaluation loss
|
—
|
%
|
|
0.2
|
%
|
|
9.9
|
%
|
Impact of U.S. Tax Reform
|
(127.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
Other
|
(1.2
|
)%
|
|
0.1
|
%
|
|
(0.2
|
)%
|
Effective tax rate
|
(98.7
|
)%
|
|
27.5
|
%
|
|
36.2
|
%
|
•
|
The 2016 tax year included a benefit related to the impact on deferred taxes of a 10 basis point reduction in the state tax rate and a 100 basis point statutory rate reduction in the United Kingdom.
|
•
|
The 2015 tax year included a benefit related to the impact on deferred taxes of a 200 basis point statutory rate reduction in the United Kingdom.
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible assets, net
|
$
|
13,637
|
|
|
$
|
20,946
|
|
Property, plant and equipment, net
|
641
|
|
|
1,035
|
|
||
Other
|
293
|
|
|
532
|
|
||
Deferred income tax liabilities
|
14,571
|
|
|
22,513
|
|
||
Deferred income tax assets:
|
|
|
|
||||
Benefit plans
|
(212
|
)
|
|
(1,025
|
)
|
||
Other
|
(428
|
)
|
|
(782
|
)
|
||
Deferred income tax assets
|
(640
|
)
|
|
(1,807
|
)
|
||
Valuation allowance
|
80
|
|
|
89
|
|
||
Net deferred income tax liabilities
|
$
|
14,011
|
|
|
$
|
20,795
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Balance at the beginning of the period
|
$
|
389
|
|
|
$
|
353
|
|
|
$
|
71
|
|
Increases for tax positions of prior years
|
2
|
|
|
59
|
|
|
25
|
|
|||
Decreases for tax positions of prior years
|
(35
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|||
Increases based on tax positions related to the current year
|
135
|
|
|
62
|
|
|
33
|
|
|||
Increases due to acquisitions of businesses
|
—
|
|
|
—
|
|
|
242
|
|
|||
Decreases due to settlements with taxing authorities
|
(59
|
)
|
|
(62
|
)
|
|
—
|
|
|||
Decreases due to lapse of statute of limitations
|
(24
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|||
Balance at the end of the period
|
$
|
408
|
|
|
$
|
389
|
|
|
$
|
353
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Risk-free interest rate
|
2.25
|
%
|
|
1.63
|
%
|
|
1.70
|
%
|
|||
Expected term
|
7.5 years
|
|
|
7.5 years
|
|
|
6.3 years
|
|
|||
Expected volatility
|
19.6
|
%
|
|
22.0
|
%
|
|
22.9
|
%
|
|||
Expected dividend yield
|
2.8
|
%
|
|
3.1
|
%
|
|
1.5
|
%
|
|||
Weighted average grant date fair value per share
|
$
|
14.24
|
|
|
$
|
12.48
|
|
|
$
|
9.60
|
|
|
January 3,
2016 (53 weeks) |
||
Risk-free interest rate
|
1.72
|
%
|
|
Expected volatility
|
20.10
|
%
|
|
Expected dividend yield
|
3.00
|
%
|
|
Weighted average fair value on conversion date
|
$
|
35.65
|
|
|
Number of Stock Options
|
|
Weighted Average Exercise Price
(per share) |
|
Aggregate Intrinsic Value
(in millions) |
|
Average Remaining Contractual Term
|
||||
Outstanding at December 31, 2016
|
20,560,140
|
|
|
$
|
37.39
|
|
|
|
|
|
|
Granted
|
1,579,040
|
|
|
88.98
|
|
|
|
|
|
||
Forfeited
|
(661,762
|
)
|
|
52.50
|
|
|
|
|
|
||
Exercised
|
(2,187,854
|
)
|
|
32.73
|
|
|
|
|
|
||
Outstanding at December 30, 2017
|
19,289,564
|
|
|
41.63
|
|
|
716
|
|
|
6 years
|
|
Exercisable at December 30, 2017
|
7,462,422
|
|
|
38.78
|
|
|
291
|
|
|
5 years
|
|
Number of Stock Options
|
|
Weighted Average Grant Date Fair Value
(per share) |
|||
Unvested options at December 31, 2016
|
11,899,949
|
|
|
$
|
8.26
|
|
Granted
|
1,579,040
|
|
|
14.24
|
|
|
Vested
|
(1,001,730
|
)
|
|
15.09
|
|
|
Forfeited
|
(650,117
|
)
|
|
9.89
|
|
|
Unvested options at December 30, 2017
|
11,827,142
|
|
|
8.36
|
|
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
(per share)
|
|||
Outstanding at December 31, 2016
|
806,744
|
|
|
$
|
71.95
|
|
Granted
|
1,686,254
|
|
|
85.03
|
|
|
Forfeited
|
(251,604
|
)
|
|
83.00
|
|
|
Vested
|
(141,749
|
)
|
|
73.01
|
|
|
Outstanding at December 30, 2017
|
2,099,645
|
|
|
81.05
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Pre-tax compensation cost
|
$
|
46
|
|
|
$
|
46
|
|
|
$
|
133
|
|
Related tax benefit
|
(14
|
)
|
|
(15
|
)
|
|
(48
|
)
|
|||
After-tax compensation cost
|
$
|
32
|
|
|
$
|
31
|
|
|
$
|
85
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||
Benefit obligation at beginning of year
|
$
|
5,157
|
|
|
$
|
5,990
|
|
|
$
|
3,099
|
|
|
$
|
2,892
|
|
Service cost
|
11
|
|
|
13
|
|
|
19
|
|
|
25
|
|
||||
Interest cost
|
178
|
|
|
203
|
|
|
66
|
|
|
87
|
|
||||
Participants' contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Benefits paid
|
(224
|
)
|
|
(268
|
)
|
|
(161
|
)
|
|
(158
|
)
|
||||
Actuarial losses/(gains)
|
270
|
|
|
195
|
|
|
120
|
|
|
540
|
|
||||
Plan amendments
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Currency
|
—
|
|
|
—
|
|
|
264
|
|
|
(281
|
)
|
||||
Settlements
|
(692
|
)
|
|
(966
|
)
|
|
(1
|
)
|
|
(12
|
)
|
||||
Special/contractual termination benefits
|
19
|
|
|
—
|
|
|
9
|
|
|
3
|
|
||||
Other
|
—
|
|
|
(10
|
)
|
|
51
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
4,719
|
|
|
5,157
|
|
|
3,464
|
|
|
3,099
|
|
||||
Fair value of plan assets at beginning of year
|
4,788
|
|
|
5,282
|
|
|
3,628
|
|
|
3,428
|
|
||||
Actual return on plan assets
|
613
|
|
|
435
|
|
|
289
|
|
|
712
|
|
||||
Participants' contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Employer contributions
|
300
|
|
|
311
|
|
|
30
|
|
|
33
|
|
||||
Benefits paid
|
(224
|
)
|
|
(268
|
)
|
|
(161
|
)
|
|
(158
|
)
|
||||
Currency
|
—
|
|
|
—
|
|
|
322
|
|
|
(378
|
)
|
||||
Settlements
|
(692
|
)
|
|
(966
|
)
|
|
(1
|
)
|
|
(12
|
)
|
||||
Other
|
—
|
|
|
(6
|
)
|
|
49
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
4,785
|
|
|
4,788
|
|
|
4,156
|
|
|
3,628
|
|
||||
Net pension liability/(asset) recognized at end of year
|
$
|
(66
|
)
|
|
$
|
369
|
|
|
$
|
(692
|
)
|
|
$
|
(529
|
)
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Other assets (long-term assets)
|
$
|
871
|
|
|
$
|
641
|
|
Accrued postemployment costs (current liabilities)
|
(41
|
)
|
|
(3
|
)
|
||
Accrued postemployment costs (long-term liabilities)
|
(72
|
)
|
|
(478
|
)
|
||
Net pension asset/(liability) recognized
|
$
|
758
|
|
|
$
|
160
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
3,669
|
|
|
$
|
1,368
|
|
|
$
|
527
|
|
Accumulated benefit obligation
|
—
|
|
|
3,669
|
|
|
1,360
|
|
|
527
|
|
||||
Fair value of plan assets
|
—
|
|
|
3,282
|
|
|
1,254
|
|
|
437
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
3,669
|
|
|
$
|
1,400
|
|
|
$
|
539
|
|
Accumulated benefit obligation
|
—
|
|
|
3,669
|
|
|
1,392
|
|
|
534
|
|
||||
Fair value of plan assets
|
—
|
|
|
3,282
|
|
|
1,287
|
|
|
445
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Discount rate
|
3.7
|
%
|
|
4.2
|
%
|
|
2.4
|
%
|
|
2.9
|
%
|
Rate of compensation increase
|
4.1
|
%
|
|
4.1
|
%
|
|
3.9
|
%
|
|
4.0
|
%
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||||||||
Service cost
|
$
|
11
|
|
|
$
|
13
|
|
|
$
|
45
|
|
|
$
|
19
|
|
|
$
|
25
|
|
|
$
|
26
|
|
Interest cost
|
178
|
|
|
203
|
|
|
164
|
|
|
66
|
|
|
87
|
|
|
103
|
|
||||||
Expected return on plan assets
|
(262
|
)
|
|
(290
|
)
|
|
(179
|
)
|
|
(180
|
)
|
|
(182
|
)
|
|
(194
|
)
|
||||||
Amortization of unrecognized losses/(gains)
|
—
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
2
|
|
|
23
|
|
|
102
|
|
|
—
|
|
|
2
|
|
|
17
|
|
||||||
Curtailments
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
||||||
Special/contractual termination benefits
|
19
|
|
|
—
|
|
|
4
|
|
|
9
|
|
|
3
|
|
|
6
|
|
||||||
Other
|
2
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
||||||
Net pension cost/(benefit)
|
$
|
(50
|
)
|
|
$
|
(51
|
)
|
|
$
|
43
|
|
|
$
|
(100
|
)
|
|
$
|
(65
|
)
|
|
$
|
(89
|
)
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Discount rate - Service Cost
|
4.2
|
%
|
|
4.5
|
%
|
|
4.4
|
%
|
|
3.2
|
%
|
|
4.2
|
%
|
|
3.7
|
%
|
Discount rate - Interest Cost
|
3.6
|
%
|
|
3.5
|
%
|
|
4.4
|
%
|
|
2.1
|
%
|
|
3.3
|
%
|
|
3.7
|
%
|
Expected rate of return on plan assets
|
5.7
|
%
|
|
5.7
|
%
|
|
5.6
|
%
|
|
4.8
|
%
|
|
5.6
|
%
|
|
6.4
|
%
|
Rate of compensation increase
|
4.1
|
%
|
|
4.1
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
3.4
|
%
|
|
3.3
|
%
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Fixed-income securities
|
62
|
%
|
|
67
|
%
|
|
39
|
%
|
|
49
|
%
|
Equity securities
|
27
|
%
|
|
30
|
%
|
|
27
|
%
|
|
31
|
%
|
Real estate
|
—
|
%
|
|
—
|
%
|
|
6
|
%
|
|
7
|
%
|
Cash and cash equivalents
|
11
|
%
|
|
3
|
%
|
|
4
|
%
|
|
8
|
%
|
Certain insurance contracts
|
—
|
%
|
|
—
|
%
|
|
24
|
%
|
|
5
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Asset Category
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Government bonds
|
$
|
467
|
|
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds and other fixed-income securities
|
2,606
|
|
|
—
|
|
|
2,606
|
|
|
—
|
|
||||
Total fixed-income securities
|
3,073
|
|
|
467
|
|
|
2,606
|
|
|
—
|
|
||||
Equity securities
|
1,044
|
|
|
1,044
|
|
|
—
|
|
|
—
|
|
||||
Real estate
|
262
|
|
|
—
|
|
|
—
|
|
|
262
|
|
||||
Cash and cash equivalents
|
208
|
|
|
205
|
|
|
3
|
|
|
—
|
|
||||
Certain insurance contracts
|
983
|
|
|
—
|
|
|
—
|
|
|
983
|
|
||||
Fair value excluding investments measured at net asset value
|
5,570
|
|
|
1,716
|
|
|
2,609
|
|
|
1,245
|
|
||||
Investments measured at net asset value
(a)
|
3,371
|
|
|
|
|
|
|
|
|||||||
Total plan assets at fair value
|
$
|
8,941
|
|
|
|
|
|
|
|
(a)
|
Amount includes cash collateral of
$278 million
associated with our securities lending program, which is reflected as an asset, and a corresponding securities lending payable of
$278 million
, which is reflected as a liability. The net impact on total plan assets at fair value is
zero
.
|
Asset Category
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Government bonds
|
$
|
484
|
|
|
$
|
410
|
|
|
$
|
74
|
|
|
$
|
—
|
|
Corporate bonds and other fixed-income securities
|
2,952
|
|
|
—
|
|
|
2,952
|
|
|
—
|
|
||||
Total fixed-income securities
|
3,436
|
|
|
410
|
|
|
3,026
|
|
|
—
|
|
||||
Equity securities
|
765
|
|
|
765
|
|
|
—
|
|
|
—
|
|
||||
Real estate
|
234
|
|
|
—
|
|
|
—
|
|
|
234
|
|
||||
Cash and cash equivalents
|
49
|
|
|
31
|
|
|
18
|
|
|
—
|
|
||||
Certain insurance contracts
|
189
|
|
|
—
|
|
|
—
|
|
|
189
|
|
||||
Fair value excluding investments measured at net asset value
|
4,673
|
|
|
1,206
|
|
|
3,044
|
|
|
423
|
|
||||
Investments measured at net asset value
|
3,743
|
|
|
|
|
|
|
|
|||||||
Total plan assets at fair value
|
$
|
8,416
|
|
|
|
|
|
|
|
Asset Category
|
December 31,
2016 (52 weeks) |
|
Additions
|
|
Net Realized Gain/(Loss)
|
|
Net Unrealized Gain/(Loss)
|
|
Net Purchases, Issuances and Settlements
|
|
Transfers Into/(Out of) Level 3
|
|
December 30,
2017 (52 weeks) |
||||||||||||||
Real estate
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
262
|
|
Certain insurance contracts
|
189
|
|
|
797
|
|
|
—
|
|
|
36
|
|
|
(39
|
)
|
|
—
|
|
|
983
|
|
|||||||
Total Level 3 investments
|
$
|
423
|
|
|
$
|
797
|
|
|
$
|
14
|
|
|
$
|
50
|
|
|
$
|
(39
|
)
|
|
$
|
—
|
|
|
$
|
1,245
|
|
Asset Category
|
January 3,
2016 (53 weeks) |
|
Net Realized Gain/(Loss)
|
|
Net Unrealized Gain/(Loss)
|
|
Net Purchases, Issuances and Settlements
|
|
Transfers Into/(Out of) Level 3
|
|
December 31,
2016 (52 weeks) |
||||||||||||
Equity securities
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Real estate
|
288
|
|
|
6
|
|
|
(37
|
)
|
|
(23
|
)
|
|
—
|
|
|
234
|
|
||||||
Certain insurance contracts
|
236
|
|
|
—
|
|
|
13
|
|
|
(49
|
)
|
|
(11
|
)
|
|
189
|
|
||||||
Total Level 3 investments
|
$
|
525
|
|
|
$
|
6
|
|
|
$
|
(24
|
)
|
|
$
|
(73
|
)
|
|
$
|
(11
|
)
|
|
$
|
423
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
2018
|
$
|
367
|
|
|
$
|
1,343
|
|
2019
|
331
|
|
|
72
|
|
||
2020
|
334
|
|
|
73
|
|
||
2021
|
337
|
|
|
76
|
|
||
2022
|
357
|
|
|
85
|
|
||
2023-2027
|
1,531
|
|
|
452
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Benefit obligation at beginning of year
|
$
|
1,714
|
|
|
$
|
1,945
|
|
Service cost
|
10
|
|
|
11
|
|
||
Interest cost
|
49
|
|
|
51
|
|
||
Benefits paid
|
(142
|
)
|
|
(150
|
)
|
||
Actuarial losses/(gains)
|
(70
|
)
|
|
5
|
|
||
Plan amendments
|
(24
|
)
|
|
(158
|
)
|
||
Currency
|
13
|
|
|
6
|
|
||
Other
|
3
|
|
|
4
|
|
||
Benefit obligation at end of year
|
1,553
|
|
|
1,714
|
|
||
Fair value of plan assets at beginning of year
|
—
|
|
|
—
|
|
||
Employer contributions
|
1,329
|
|
|
—
|
|
||
Benefits paid
|
(142
|
)
|
|
—
|
|
||
Other
|
1
|
|
|
—
|
|
||
Fair value of plan assets at end of year
|
1,188
|
|
|
—
|
|
||
Net postretirement benefit liability/(asset) recognized at end of year
|
$
|
365
|
|
|
$
|
1,714
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Accrued postemployment costs (current liabilities)
|
(10
|
)
|
|
(153
|
)
|
||
Accrued postemployment costs (long-term liabilities)
|
(355
|
)
|
|
(1,561
|
)
|
||
Net postretirement benefit asset/(liability) recognized
|
$
|
(365
|
)
|
|
$
|
(1,714
|
)
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Accumulated benefit obligation
|
$
|
1,553
|
|
|
$
|
1,714
|
|
Fair value of plan assets
|
1,188
|
|
|
—
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||
Discount rate
|
3.5
|
%
|
|
3.8
|
%
|
Health care cost trend rate assumed for next year
|
6.7
|
%
|
|
6.3
|
%
|
Ultimate trend rate
|
4.9
|
%
|
|
4.9
|
%
|
|
One-Percentage-Point
|
||||||
|
Increase
|
|
(Decrease)
|
||||
Effect on annual service and interest cost
|
$
|
4
|
|
|
$
|
(3
|
)
|
Effect on postretirement benefit obligation
|
55
|
|
|
(47
|
)
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Service cost
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
13
|
|
Interest cost
|
49
|
|
|
51
|
|
|
56
|
|
|||
Amortization of prior service costs/(credits)
|
(328
|
)
|
|
(362
|
)
|
|
(112
|
)
|
|||
Amortization of unrecognized losses/(gains)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Curtailments
|
(177
|
)
|
|
—
|
|
|
1
|
|
|||
Net postretirement cost/(benefit)
|
$
|
(446
|
)
|
|
$
|
(301
|
)
|
|
$
|
(42
|
)
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|||
Discount rate - Service Cost
|
4.0
|
%
|
|
4.3
|
%
|
|
4.2
|
%
|
Discount rate - Interest Cost
|
3.0
|
%
|
|
3.0
|
%
|
|
4.2
|
%
|
Health care cost trend rate
|
6.3
|
%
|
|
6.5
|
%
|
|
6.7
|
%
|
2018
|
$
|
147
|
|
2019
|
140
|
|
|
2020
|
133
|
|
|
2021
|
126
|
|
|
2022
|
120
|
|
|
2023-2027
|
504
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
Total
|
||||||||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||
Net actuarial gain/(loss)
|
$
|
13
|
|
|
$
|
(35
|
)
|
|
$
|
111
|
|
|
$
|
64
|
|
|
$
|
124
|
|
|
$
|
29
|
|
Prior service credit/(cost)
|
1
|
|
|
—
|
|
|
748
|
|
|
1,205
|
|
|
749
|
|
|
1,205
|
|
||||||
|
$
|
14
|
|
|
$
|
(35
|
)
|
|
$
|
859
|
|
|
$
|
1,269
|
|
|
$
|
873
|
|
|
$
|
1,234
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Net postemployment benefit gains/(losses) arising during the period:
|
|
|
|
|
|
||||||
Net actuarial gains/(losses) arising during the period - Pension Benefits
|
$
|
45
|
|
|
$
|
(73
|
)
|
|
$
|
3
|
|
Net actuarial gains/(losses) arising during the period - Postretirement Benefits
|
71
|
|
|
(5
|
)
|
|
62
|
|
|||
Prior service credits/(costs) arising during the period - Pension Benefits
|
1
|
|
|
—
|
|
|
(7
|
)
|
|||
Prior service credits/(costs) arising during the period - Postretirement Benefits
|
24
|
|
|
158
|
|
|
1,507
|
|
|||
|
141
|
|
|
80
|
|
|
1,565
|
|
|||
Tax benefit/(expense)
|
(55
|
)
|
|
(23
|
)
|
|
(619
|
)
|
|||
|
$
|
86
|
|
|
$
|
57
|
|
|
$
|
946
|
|
|
|
|
|
|
|
||||||
Reclassification of net postemployment benefit losses/(gains) to net income/(loss):
|
|
|
|
|
|
||||||
Amortization of unrecognized losses/(gains) - Pension Benefits
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Amortization of unrecognized losses/(gains) - Postretirement Benefits
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Amortization of prior service costs/(credits) - Postretirement Benefits
|
(328
|
)
|
|
(362
|
)
|
|
(112
|
)
|
|||
Net settlement and curtailment losses/(gains) - Pension Benefits
|
2
|
|
|
25
|
|
|
(24
|
)
|
|||
Net settlement and curtailment losses/(gains) - Postretirement Benefits
|
(177
|
)
|
|
—
|
|
|
1
|
|
|||
|
(502
|
)
|
|
(338
|
)
|
|
(132
|
)
|
|||
Tax benefit/(expense)
|
193
|
|
|
131
|
|
|
47
|
|
|||
|
$
|
(309
|
)
|
|
$
|
(207
|
)
|
|
$
|
(85
|
)
|
|
Notional Amount
|
||||||
|
December 30, 2017
|
|
December 31, 2016
|
||||
Commodity contracts
|
$
|
272
|
|
|
$
|
459
|
|
Foreign exchange contracts
|
2,876
|
|
|
2,997
|
|
||
Cross-currency contracts
|
3,161
|
|
|
3,173
|
|
|
December 30, 2017
|
||||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets and Liabilities
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total Fair Value
|
||||||||||||||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
42
|
|
Cross-currency contracts
|
—
|
|
|
—
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|
—
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity contracts
|
4
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
8
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
17
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
3
|
|
||||||||
Cross-currency contracts
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||||
Total fair value
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
388
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
53
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets and Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||||||||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
13
|
|
Cross-currency contracts
|
—
|
|
|
—
|
|
|
580
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
580
|
|
|
36
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity contracts
|
28
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
7
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
35
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
30
|
|
||||||||
Cross-currency contracts
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||||||
Total fair value
|
$
|
28
|
|
|
$
|
7
|
|
|
$
|
728
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
756
|
|
|
$
|
86
|
|
Instrument
|
|
Notional
(local)
(in billions)
|
|
Notional
(USD)
(in billions)
|
|
Maturity
|
||||
Cross-currency swap
|
|
£
|
0.8
|
|
|
$
|
1.4
|
|
|
October 2019
|
Cross-currency swap
|
|
C$
|
1.8
|
|
|
$
|
1.6
|
|
|
December 2019
|
•
|
foreign exchange contracts for periods not exceeding the next
18
months; and
|
•
|
cross-currency contracts for periods not exceeding the next
24
months.
|
•
|
commodity contracts for periods not exceeding the next
12
months; and
|
•
|
foreign exchange contracts for periods not exceeding the next
six
months.
|
•
|
cross-currency contracts for periods not exceeding the next
22
months.
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
||||||||||||||||||||||||||||
|
Commodity Contracts
|
|
Foreign Exchange
Contracts |
|
Cross-Currency Contracts
|
|
Interest Rate Contracts
|
|
Commodity Contracts
|
|
Foreign Exchange
Contracts |
|
Cross-Currency Contracts
|
|
Interest Rate
Contracts |
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
$
|
—
|
|
|
$
|
(123
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
—
|
|
|
(23
|
)
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
147
|
|
|
—
|
|
||||||||
Total gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
$
|
—
|
|
|
$
|
(146
|
)
|
|
$
|
(184
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
93
|
|
|
$
|
147
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges reclassified to net income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of products sold (effective portion)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
||||||||
Other expense/(income), net
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
||||||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||||
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
85
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gains/(losses) on derivatives recognized in cost of products sold
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gains/(losses) on derivatives recognized in other expense/(income), net
|
—
|
|
|
54
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
(3
|
)
|
|
—
|
|
||||||||
|
(37
|
)
|
|
54
|
|
|
(2
|
)
|
|
—
|
|
|
9
|
|
|
(63
|
)
|
|
(3
|
)
|
|
—
|
|
||||||||
Total gains/(losses) recognized in statements of income
|
$
|
(37
|
)
|
|
$
|
(27
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
9
|
|
|
$
|
22
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
January 3,
2016 (53 weeks) |
||||||||||||||
|
Commodity Contracts
|
|
Foreign Exchange Contracts
|
|
Cross-Currency Contracts
|
|
Interest Rate Contracts
|
||||||||
|
(in millions)
|
||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
(111
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
||||||||
Gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
—
|
|
|
—
|
|
|
736
|
|
|
—
|
|
||||
Total gains/(losses) recognized in other comprehensive income/(loss) (effective portion)
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
736
|
|
|
$
|
(111
|
)
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges reclassified to net income/(loss):
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of products sold (effective portion)
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
||||
Other expense/(income), net
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
||||
|
—
|
|
|
44
|
|
|
—
|
|
|
(239
|
)
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Gains/(losses) on derivatives recognized in cost of products sold
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gains/(losses) on derivatives recognized in other expense/(income), net
|
—
|
|
|
92
|
|
|
53
|
|
|
8
|
|
||||
|
(57
|
)
|
|
92
|
|
|
53
|
|
|
8
|
|
||||
Total gains/(losses) recognized in statements of income
|
$
|
(57
|
)
|
|
$
|
136
|
|
|
$
|
53
|
|
|
$
|
(231
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Net Postemployment Benefit Plan Adjustments
|
|
Net Cash Flow Hedge Adjustments
|
|
Total
|
||||||||
Balance as of December 28, 2014
|
$
|
(574
|
)
|
|
$
|
61
|
|
|
$
|
(61
|
)
|
|
$
|
(574
|
)
|
Foreign currency translation adjustments
|
(1,578
|
)
|
|
—
|
|
|
—
|
|
|
(1,578
|
)
|
||||
Net deferred gains/(losses) on net investment hedges
|
506
|
|
|
—
|
|
|
—
|
|
|
506
|
|
||||
Net postemployment benefit gains/(losses) arising during the period
|
—
|
|
|
946
|
|
|
—
|
|
|
946
|
|
||||
Reclassification of net postemployment benefit losses/(gains)
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
(85
|
)
|
||||
Net deferred gains/(losses) on cash flow hedges
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
—
|
|
|
—
|
|
|
120
|
|
|
120
|
|
||||
Total other comprehensive income/(loss)
|
(1,072
|
)
|
|
861
|
|
|
114
|
|
|
(97
|
)
|
||||
Balance as of January 3, 2016
|
$
|
(1,646
|
)
|
|
$
|
922
|
|
|
$
|
53
|
|
|
$
|
(671
|
)
|
Foreign currency translation adjustments
|
(992
|
)
|
|
—
|
|
|
—
|
|
|
(992
|
)
|
||||
Net deferred gains/(losses) on net investment hedges
|
226
|
|
|
—
|
|
|
—
|
|
|
226
|
|
||||
Net postemployment benefit gains/(losses) arising during the period
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Reclassification of net postemployment benefit losses/(gains)
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
(207
|
)
|
||||
Net deferred gains/(losses) on cash flow hedges
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
—
|
|
|
—
|
|
|
(87
|
)
|
|
(87
|
)
|
||||
Total other comprehensive income/(loss)
|
(766
|
)
|
|
(150
|
)
|
|
(41
|
)
|
|
(957
|
)
|
||||
Balance as of December 31, 2016
|
$
|
(2,412
|
)
|
|
$
|
772
|
|
|
$
|
12
|
|
|
$
|
(1,628
|
)
|
Foreign currency translation adjustments
|
1,178
|
|
|
—
|
|
|
—
|
|
|
1,178
|
|
||||
Net deferred gains/(losses) on net investment hedges
|
(353
|
)
|
|
—
|
|
|
—
|
|
|
(353
|
)
|
||||
Net postemployment benefit gains/(losses) arising during the period
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
||||
Reclassification of net postemployment benefit losses/(gains)
|
—
|
|
|
(309
|
)
|
|
—
|
|
|
(309
|
)
|
||||
Net deferred gains/(losses) on cash flow hedges
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
(113
|
)
|
||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
—
|
|
|
—
|
|
|
85
|
|
|
85
|
|
||||
Total other comprehensive income/(loss)
|
825
|
|
|
(223
|
)
|
|
(28
|
)
|
|
574
|
|
||||
Balance as of December 30, 2017
|
$
|
(1,587
|
)
|
|
$
|
549
|
|
|
$
|
(16
|
)
|
|
$
|
(1,054
|
)
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||||||||||||||||||||||||||
|
Before Tax Amount
|
|
Tax
|
|
Net of Tax Amount
|
|
Before Tax Amount
|
|
Tax
|
|
Net of Tax Amount
|
|
Before Tax Amount
|
|
Tax
|
|
Net of Tax Amount
|
||||||||||||||||||
Foreign currency translation adjustments
|
$
|
1,178
|
|
|
$
|
—
|
|
|
$
|
1,178
|
|
|
$
|
(992
|
)
|
|
$
|
—
|
|
|
$
|
(992
|
)
|
|
$
|
(1,578
|
)
|
|
$
|
—
|
|
|
$
|
(1,578
|
)
|
Net deferred gains/(losses) on net investment hedges
|
(632
|
)
|
|
279
|
|
|
(353
|
)
|
|
426
|
|
|
(200
|
)
|
|
226
|
|
|
801
|
|
|
(295
|
)
|
|
506
|
|
|||||||||
Net actuarial gains/(losses) arising during the period
|
116
|
|
|
(47
|
)
|
|
69
|
|
|
(78
|
)
|
|
38
|
|
|
(40
|
)
|
|
65
|
|
|
(42
|
)
|
|
23
|
|
|||||||||
Prior service credits/(costs) arising during the period
|
25
|
|
|
(8
|
)
|
|
17
|
|
|
158
|
|
|
(61
|
)
|
|
97
|
|
|
1,500
|
|
|
(577
|
)
|
|
923
|
|
|||||||||
Reclassification of net postemployment benefit losses/(gains)
|
(502
|
)
|
|
193
|
|
|
(309
|
)
|
|
(338
|
)
|
|
131
|
|
|
(207
|
)
|
|
(132
|
)
|
|
47
|
|
|
(85
|
)
|
|||||||||
Net deferred gains/(losses) on cash flow hedges
|
(123
|
)
|
|
10
|
|
|
(113
|
)
|
|
40
|
|
|
6
|
|
|
46
|
|
|
(38
|
)
|
|
32
|
|
|
(6
|
)
|
|||||||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income
|
85
|
|
|
—
|
|
|
85
|
|
|
(81
|
)
|
|
(6
|
)
|
|
(87
|
)
|
|
195
|
|
|
(75
|
)
|
|
120
|
|
Accumulated Other Comprehensive Income/(Losses) Component
|
|
Reclassified from Accumulated Other Comprehensive Income/(Losses)
|
|
Affected Line Item in the Statement Where Net Income/(Loss) is Presented
|
||||||||||
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
|
|
||||||
Losses/(gains) on cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
2
|
|
|
Net sales
|
Foreign exchange contracts
|
|
—
|
|
|
(41
|
)
|
|
(45
|
)
|
|
Cost of products sold
|
|||
Foreign exchange contracts
|
|
81
|
|
|
(38
|
)
|
|
(1
|
)
|
|
Other expense/(income), net
|
|||
Interest rate contracts
|
|
4
|
|
|
4
|
|
|
239
|
|
|
Interest expense
|
|||
Losses/(gains) on cash flow hedges before income taxes
|
|
85
|
|
|
(81
|
)
|
|
195
|
|
|
|
|||
Losses/(gains) on cash flow hedges, income taxes
|
|
—
|
|
|
(6
|
)
|
|
(75
|
)
|
|
|
|||
Losses/(gains) on cash flow hedges
|
|
$
|
85
|
|
|
$
|
(87
|
)
|
|
$
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Losses/(gains) on postemployment benefits:
|
|
|
|
|
|
|
|
|
||||||
Amortization of unrecognized losses/(gains)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
(a)
|
Amortization of prior service costs/(credits)
|
|
(328
|
)
|
|
(362
|
)
|
|
(112
|
)
|
|
(a)
|
|||
Settlement and curtailment losses/(gains)
|
|
(175
|
)
|
|
25
|
|
|
(23
|
)
|
|
(a)
|
|||
Losses/(gains) on postemployment benefits before income taxes
|
|
(502
|
)
|
|
(338
|
)
|
|
(132
|
)
|
|
|
|||
Losses/(gains) on postemployment benefits, income taxes
|
|
193
|
|
|
131
|
|
|
47
|
|
|
|
|||
Losses/(gains) on postemployment benefits
|
|
$
|
(309
|
)
|
|
$
|
(207
|
)
|
|
$
|
(85
|
)
|
|
|
(a)
|
These components are included in the computation of net periodic postemployment benefit costs. See Note 10,
Postemployment Benefits
, for additional information.
|
•
|
the official exchange rate of BsF
10
per U.S. dollar available through the Sistema de Divisa Protegida (“DIPRO”) for purchases and sales of essential items, including food products; and
|
•
|
an alternative exchange rate available through the Sistema de Divisa Complementaria (“DICOM”) for all transactions not covered by DIPRO. The published DICOM rate was BsF
3,345
per U.S. dollar at
December 30, 2017
.
|
2018
|
$
|
103
|
|
2019
|
91
|
|
|
2020
|
73
|
|
|
2021
|
54
|
|
|
2022
|
45
|
|
|
Thereafter
|
165
|
|
|
Total
|
$
|
531
|
|
2018
|
$
|
1,558
|
|
2019
|
724
|
|
|
2020
|
527
|
|
|
2021
|
235
|
|
|
2022
|
211
|
|
|
Thereafter
|
439
|
|
|
Total
|
$
|
3,694
|
|
|
|
Priority
1
|
|
Maturity Dates
|
|
Interest Rates
2
|
|
Carrying Values
|
||||||
|
|
|
|
|
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
|
|
|
(in millions)
|
||||||
U.S. dollar notes:
|
|
|
|
|
|
|
|
|
|
|
||||
2025 Notes
(a)
|
|
Senior Secured Notes
|
|
February 15, 2025
|
|
4.875%
|
|
$
|
1,192
|
|
|
$
|
1,191
|
|
Other U.S. dollar notes
(b)(c)
|
|
Senior Notes
|
|
2018-2046
|
|
1.823% - 7.125%
|
|
25,165
|
|
|
25,761
|
|
||
Euro notes
(b)
|
|
Senior Notes
|
|
2023-2028
|
|
1.500% - 2.250%
|
|
3,037
|
|
|
2,656
|
|
||
Canadian dollar notes
(b)
|
|
Senior Notes
|
|
2018-2020
|
|
2.214% - 2.700%
|
|
794
|
|
|
743
|
|
||
British pound sterling notes
(b)(d)
|
|
Senior Notes
|
|
2027-2030
|
|
4.125% - 6.250%
|
|
712
|
|
|
650
|
|
||
Term Loan Facility
(e)
|
|
Senior Unsecured Loan
|
|
|
|
|
|
—
|
|
|
596
|
|
||
Other long-term debt
|
|
Various
|
|
2018-2035
|
|
0.500% - 5.800%
|
|
56
|
|
|
54
|
|
||
Capital lease obligations
|
|
|
|
|
|
|
|
120
|
|
|
108
|
|
||
Total long-term debt
|
|
|
|
|
|
|
|
31,076
|
|
|
31,759
|
|
||
Current portion of long-term debt
|
|
|
|
|
|
|
|
2,743
|
|
|
2,046
|
|
||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
$
|
28,333
|
|
|
$
|
29,713
|
|
1
|
Priority of debt indicates the order which debt would be paid if all debt obligations were due on the same day. Senior secured debt takes priority over unsecured debt. Senior debt has greater seniority than subordinated debt.
|
2
|
Floating interest rates are stated as of December 30, 2017.
|
(a)
|
The
4.875%
Second Lien Senior Secured Notes due February 15, 2025 (the “2025 Notes”) are senior in right of payment of existing and future unsecured and subordinated indebtedness.
|
(b)
|
We fully and unconditionally guarantee these notes, which were issued by Kraft Heinz Foods Company.
|
(d)
|
Includes
£125 million
aggregate principal amount of
6.250%
Pound Sterling Notes due February 18, 2030 (the “2030 Notes”) previously issued by H.J. Heinz Finance UK Plc and guaranteed by Kraft Heinz Foods Company, which we became guarantor of in connection with the 2015 Merger.
|
(e)
|
We repaid the Term Loan Facility in 2017; therefore, no amounts were outstanding, nor was there an applicable maturity date or interest rate, at December 30, 2017.
|
2018
|
$
|
2,697
|
|
2019
|
355
|
|
|
2020
|
3,042
|
|
|
2021
|
691
|
|
|
2022
|
3,507
|
|
|
Thereafter
|
20,273
|
|
|
Shares Issued
|
|
Treasury Shares
|
|
Shares Outstanding
|
|||
Balance at December 28, 2014
|
377
|
|
|
—
|
|
|
377
|
|
Exercise of warrants
|
20
|
|
|
—
|
|
|
20
|
|
Issuance of common stock to Sponsors
|
222
|
|
|
—
|
|
|
222
|
|
Acquisition of Kraft Foods Group, Inc.
|
593
|
|
|
—
|
|
|
593
|
|
Exercise of stock options, issuance of other stock awards, and other
|
2
|
|
|
—
|
|
|
2
|
|
Balance at January 3, 2016
|
1,214
|
|
|
—
|
|
|
1,214
|
|
Exercise of stock options, issuance of other stock awards, and other
|
5
|
|
|
(2
|
)
|
|
3
|
|
Balance at December 31, 2016
|
1,219
|
|
|
(2
|
)
|
|
1,217
|
|
Exercise of stock options, issuance of other stock awards, and other
|
2
|
|
|
—
|
|
|
2
|
|
Balance at December 30, 2017
|
1,221
|
|
|
(2
|
)
|
|
1,219
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
|
(in millions, except per share data)
|
||||||||||
Basic Earnings Per Common Share:
|
|
|
|
|
|
||||||
Net income/(loss) attributable to common shareholders
|
$
|
10,999
|
|
|
$
|
3,452
|
|
|
$
|
(266
|
)
|
Weighted average shares of common stock outstanding
|
1,218
|
|
|
1,217
|
|
|
786
|
|
|||
Net earnings/(loss)
|
$
|
9.03
|
|
|
$
|
2.84
|
|
|
$
|
(0.34
|
)
|
Diluted Earnings Per Common Share:
|
|
|
|
|
|
||||||
Net income/(loss) attributable to common shareholders
|
$
|
10,999
|
|
|
$
|
3,452
|
|
|
$
|
(266
|
)
|
Weighted average shares of common stock outstanding
|
1,218
|
|
|
1,217
|
|
|
786
|
|
|||
Effect of dilutive equity awards
|
10
|
|
|
9
|
|
|
—
|
|
|||
Weighted average shares of common stock outstanding, including dilutive effect
|
1,228
|
|
|
1,226
|
|
|
786
|
|
|||
Net earnings/(loss)
|
$
|
8.95
|
|
|
$
|
2.81
|
|
|
$
|
(0.34
|
)
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
$
|
10,943
|
|
Canada
|
2,190
|
|
|
2,309
|
|
|
1,437
|
|
|||
Europe
|
2,393
|
|
|
2,366
|
|
|
2,656
|
|
|||
Rest of World
|
3,296
|
|
|
3,171
|
|
|
3,302
|
|
|||
Total net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Segment Adjusted EBITDA:
|
|
|
|
|
|
||||||
United States
|
$
|
6,001
|
|
|
$
|
5,862
|
|
|
$
|
4,690
|
|
Canada
|
639
|
|
|
642
|
|
|
541
|
|
|||
Europe
|
781
|
|
|
781
|
|
|
938
|
|
|||
Rest of World
|
617
|
|
|
657
|
|
|
742
|
|
|||
General corporate expenses
|
(108
|
)
|
|
(164
|
)
|
|
(172
|
)
|
|||
Depreciation and amortization (excluding integration and restructuring expenses)
|
(583
|
)
|
|
(536
|
)
|
|
(779
|
)
|
|||
Integration and restructuring expenses
|
(457
|
)
|
|
(1,012
|
)
|
|
(1,117
|
)
|
|||
Merger costs
|
—
|
|
|
(30
|
)
|
|
(194
|
)
|
|||
Amortization of inventory step-up
|
—
|
|
|
—
|
|
|
(347
|
)
|
|||
Unrealized gains/(losses) on commodity hedges
|
(19
|
)
|
|
38
|
|
|
41
|
|
|||
Impairment losses
|
(49
|
)
|
|
(53
|
)
|
|
(58
|
)
|
|||
Gains/losses on sale of business
|
—
|
|
|
—
|
|
|
21
|
|
|||
Nonmonetary currency devaluation
|
—
|
|
|
(4
|
)
|
|
(57
|
)
|
|||
Equity award compensation expense (excluding integration and restructuring expenses)
|
(49
|
)
|
|
(39
|
)
|
|
(61
|
)
|
|||
Other pro forma adjustments
|
—
|
|
|
—
|
|
|
(1,549
|
)
|
|||
Operating income
|
6,773
|
|
|
6,142
|
|
|
2,639
|
|
|||
Interest expense
|
1,234
|
|
|
1,134
|
|
|
1,321
|
|
|||
Other expense/(income), net
|
9
|
|
|
(15
|
)
|
|
305
|
|
|||
Income/(loss) before income taxes
|
$
|
5,530
|
|
|
$
|
5,023
|
|
|
$
|
1,013
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
United States
|
$
|
661
|
|
|
$
|
966
|
|
|
$
|
484
|
|
Canada
|
48
|
|
|
56
|
|
|
36
|
|
|||
Europe
|
96
|
|
|
84
|
|
|
86
|
|
|||
Rest of World
|
101
|
|
|
87
|
|
|
85
|
|
|||
General corporate expenses
|
130
|
|
|
144
|
|
|
49
|
|
|||
Total depreciation and amortization expense
|
$
|
1,036
|
|
|
$
|
1,337
|
|
|
$
|
740
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
United States
|
$
|
764
|
|
|
$
|
843
|
|
|
$
|
377
|
|
Canada
|
42
|
|
|
30
|
|
|
19
|
|
|||
Europe
|
125
|
|
|
109
|
|
|
106
|
|
|||
Rest of World
|
209
|
|
|
102
|
|
|
99
|
|
|||
General corporate expenses
|
77
|
|
|
163
|
|
|
47
|
|
|||
Total capital expenditures
|
$
|
1,217
|
|
|
$
|
1,247
|
|
|
$
|
648
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Condiments and sauces
|
$
|
6,439
|
|
|
$
|
6,475
|
|
|
$
|
5,877
|
|
Cheese and dairy
|
5,482
|
|
|
5,619
|
|
|
2,795
|
|
|||
Ambient meals
|
2,310
|
|
|
2,345
|
|
|
1,859
|
|
|||
Frozen and chilled meals
|
2,578
|
|
|
2,548
|
|
|
2,179
|
|
|||
Meats and seafood
|
2,609
|
|
|
2,703
|
|
|
1,480
|
|
|||
Refreshment beverages
|
1,508
|
|
|
1,524
|
|
|
665
|
|
|||
Coffee
|
1,423
|
|
|
1,494
|
|
|
710
|
|
|||
Infant and nutrition
|
755
|
|
|
761
|
|
|
902
|
|
|||
Desserts, toppings and baking
|
956
|
|
|
981
|
|
|
521
|
|
|||
Nuts and salted snacks
|
937
|
|
|
1,050
|
|
|
562
|
|
|||
Other
|
1,235
|
|
|
987
|
|
|
788
|
|
|||
Total net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
|
December 30,
2017 (52 weeks) |
|
December 31,
2016 (52 weeks) |
|
January 3,
2016 (53 weeks) |
||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
18,353
|
|
|
$
|
18,641
|
|
|
$
|
10,943
|
|
Canada
|
2,190
|
|
|
2,309
|
|
|
1,437
|
|
|||
United Kingdom
|
1,021
|
|
|
1,055
|
|
|
1,334
|
|
|||
Other
|
4,668
|
|
|
4,482
|
|
|
4,624
|
|
|||
Total net sales
|
$
|
26,232
|
|
|
$
|
26,487
|
|
|
$
|
18,338
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
92,129
|
|
|
$
|
92,243
|
|
Canada
|
6,592
|
|
|
6,172
|
|
||
United Kingdom
|
6,219
|
|
|
5,669
|
|
||
Other
|
6,453
|
|
|
6,026
|
|
||
Total long-lived assets
|
$
|
111,393
|
|
|
$
|
110,110
|
|
|
2017 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||
Net sales
|
$
|
6,364
|
|
|
$
|
6,677
|
|
|
$
|
6,314
|
|
|
$
|
6,877
|
|
Gross profit
|
2,301
|
|
|
2,681
|
|
|
2,314
|
|
|
2,407
|
|
||||
Net income/(loss)
|
891
|
|
|
1,160
|
|
|
943
|
|
|
7,996
|
|
||||
Net income/(loss) attributable to Kraft Heinz
|
893
|
|
|
1,159
|
|
|
944
|
|
|
8,003
|
|
||||
Net income/(loss) attributable to common shareholders
|
893
|
|
|
1,159
|
|
|
944
|
|
|
8,003
|
|
||||
Per share data applicable to common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic earnings/(loss)
|
0.73
|
|
|
0.95
|
|
|
0.78
|
|
|
6.57
|
|
||||
Diluted earnings/(loss)
|
0.73
|
|
|
0.94
|
|
|
0.77
|
|
|
6.52
|
|
|
2016 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||
Net sales
|
$
|
6,570
|
|
|
$
|
6,793
|
|
|
$
|
6,267
|
|
|
$
|
6,857
|
|
Gross profit
|
2,378
|
|
|
2,531
|
|
|
2,218
|
|
|
2,459
|
|
||||
Net income/(loss)
|
900
|
|
|
955
|
|
|
843
|
|
|
944
|
|
||||
Net income/(loss) attributable to Kraft Heinz
|
896
|
|
|
950
|
|
|
842
|
|
|
944
|
|
||||
Net income/(loss) attributable to common shareholders
|
896
|
|
|
770
|
|
|
842
|
|
|
944
|
|
||||
Per share data applicable to common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic earnings/(loss)
|
0.74
|
|
|
0.63
|
|
|
0.69
|
|
|
0.78
|
|
||||
Diluted earnings/(loss)
|
0.73
|
|
|
0.63
|
|
|
0.69
|
|
|
0.77
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
17,507
|
|
|
$
|
9,293
|
|
|
$
|
(568
|
)
|
|
$
|
26,232
|
|
Cost of products sold
|
—
|
|
|
10,710
|
|
|
6,387
|
|
|
(568
|
)
|
|
16,529
|
|
|||||
Gross profit
|
—
|
|
|
6,797
|
|
|
2,906
|
|
|
—
|
|
|
9,703
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
652
|
|
|
2,278
|
|
|
—
|
|
|
2,930
|
|
|||||
Intercompany service fees and other recharges
|
—
|
|
|
4,308
|
|
|
(4,308
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
—
|
|
|
1,837
|
|
|
4,936
|
|
|
—
|
|
|
6,773
|
|
|||||
Interest expense
|
—
|
|
|
1,190
|
|
|
44
|
|
|
—
|
|
|
1,234
|
|
|||||
Other expense/(income), net
|
—
|
|
|
(10
|
)
|
|
19
|
|
|
—
|
|
|
9
|
|
|||||
Income/(loss) before income taxes
|
—
|
|
|
657
|
|
|
4,873
|
|
|
—
|
|
|
5,530
|
|
|||||
Provision for/(benefit from) income taxes
|
—
|
|
|
(221
|
)
|
|
(5,239
|
)
|
|
—
|
|
|
(5,460
|
)
|
|||||
Equity in earnings of subsidiaries
|
10,999
|
|
|
10,121
|
|
|
—
|
|
|
(21,120
|
)
|
|
—
|
|
|||||
Net income/(loss)
|
10,999
|
|
|
10,999
|
|
|
10,112
|
|
|
(21,120
|
)
|
|
10,990
|
|
|||||
Net income/(loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Net income/(loss) excluding noncontrolling interest
|
$
|
10,999
|
|
|
$
|
10,999
|
|
|
$
|
10,121
|
|
|
$
|
(21,120
|
)
|
|
$
|
10,999
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income/(loss) excluding noncontrolling interest
|
$
|
11,573
|
|
|
$
|
11,573
|
|
|
$
|
7,726
|
|
|
$
|
(19,299
|
)
|
|
$
|
11,573
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
17,809
|
|
|
$
|
9,310
|
|
|
$
|
(632
|
)
|
|
$
|
26,487
|
|
Cost of products sold
|
—
|
|
|
11,156
|
|
|
6,377
|
|
|
(632
|
)
|
|
16,901
|
|
|||||
Gross profit
|
—
|
|
|
6,653
|
|
|
2,933
|
|
|
—
|
|
|
9,586
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
970
|
|
|
2,474
|
|
|
—
|
|
|
3,444
|
|
|||||
Intercompany service fees and other recharges
|
—
|
|
|
4,624
|
|
|
(4,624
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
—
|
|
|
1,059
|
|
|
5,083
|
|
|
—
|
|
|
6,142
|
|
|||||
Interest expense
|
—
|
|
|
1,076
|
|
|
58
|
|
|
—
|
|
|
1,134
|
|
|||||
Other expense/(income), net
|
—
|
|
|
144
|
|
|
(159
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Income/(loss) before income taxes
|
—
|
|
|
(161
|
)
|
|
5,184
|
|
|
—
|
|
|
5,023
|
|
|||||
Provision for/(benefit from) income taxes
|
—
|
|
|
(372
|
)
|
|
1,753
|
|
|
—
|
|
|
1,381
|
|
|||||
Equity in earnings of subsidiaries
|
3,632
|
|
|
3,421
|
|
|
—
|
|
|
(7,053
|
)
|
|
—
|
|
|||||
Net income/(loss)
|
3,632
|
|
|
3,632
|
|
|
3,431
|
|
|
(7,053
|
)
|
|
3,642
|
|
|||||
Net income/(loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income/(loss) excluding noncontrolling interest
|
$
|
3,632
|
|
|
$
|
3,632
|
|
|
$
|
3,421
|
|
|
$
|
(7,053
|
)
|
|
$
|
3,632
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income/(loss) excluding noncontrolling interest
|
$
|
2,675
|
|
|
$
|
2,675
|
|
|
$
|
5,717
|
|
|
$
|
(8,392
|
)
|
|
$
|
2,675
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
10,580
|
|
|
$
|
8,145
|
|
|
$
|
(387
|
)
|
|
$
|
18,338
|
|
Cost of products sold
|
—
|
|
|
7,298
|
|
|
5,666
|
|
|
(387
|
)
|
|
12,577
|
|
|||||
Gross profit
|
—
|
|
|
3,282
|
|
|
2,479
|
|
|
—
|
|
|
5,761
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
1,449
|
|
|
1,673
|
|
|
—
|
|
|
3,122
|
|
|||||
Intercompany service fees and other recharges
|
—
|
|
|
929
|
|
|
(929
|
)
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
—
|
|
|
904
|
|
|
1,735
|
|
|
—
|
|
|
2,639
|
|
|||||
Interest expense
|
—
|
|
|
1,221
|
|
|
100
|
|
|
—
|
|
|
1,321
|
|
|||||
Other expense/(income), net
|
—
|
|
|
140
|
|
|
165
|
|
|
—
|
|
|
305
|
|
|||||
Income/(loss) before income taxes
|
—
|
|
|
(457
|
)
|
|
1,470
|
|
|
—
|
|
|
1,013
|
|
|||||
Provision for/(benefit from) income taxes
|
—
|
|
|
(192
|
)
|
|
558
|
|
|
—
|
|
|
366
|
|
|||||
Equity in earnings of subsidiaries
|
634
|
|
|
899
|
|
|
—
|
|
|
(1,533
|
)
|
|
—
|
|
|||||
Net income/(loss)
|
634
|
|
|
634
|
|
|
912
|
|
|
(1,533
|
)
|
|
647
|
|
|||||
Net income/(loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Net income/(loss) excluding noncontrolling interest
|
$
|
634
|
|
|
$
|
634
|
|
|
$
|
899
|
|
|
$
|
(1,533
|
)
|
|
$
|
634
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income/(loss) excluding noncontrolling interest
|
$
|
537
|
|
|
$
|
537
|
|
|
$
|
(734
|
)
|
|
$
|
197
|
|
|
$
|
537
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
509
|
|
|
$
|
1,120
|
|
|
$
|
—
|
|
|
$
|
1,629
|
|
Trade receivables
|
—
|
|
|
91
|
|
|
830
|
|
|
—
|
|
|
921
|
|
|||||
Receivables due from affiliates
|
—
|
|
|
716
|
|
|
207
|
|
|
(923
|
)
|
|
—
|
|
|||||
Dividends due from affiliates
|
135
|
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
—
|
|
|||||
Sold receivables
|
—
|
|
|
—
|
|
|
353
|
|
|
—
|
|
|
353
|
|
|||||
Income taxes receivable
|
—
|
|
|
1,904
|
|
|
97
|
|
|
(1,419
|
)
|
|
582
|
|
|||||
Inventories
|
—
|
|
|
1,846
|
|
|
969
|
|
|
—
|
|
|
2,815
|
|
|||||
Short-term lending due from affiliates
|
—
|
|
|
1,598
|
|
|
3,816
|
|
|
(5,414
|
)
|
|
—
|
|
|||||
Other current assets
|
—
|
|
|
493
|
|
|
473
|
|
|
—
|
|
|
966
|
|
|||||
Total current assets
|
135
|
|
|
7,157
|
|
|
7,865
|
|
|
(7,891
|
)
|
|
7,266
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
4,577
|
|
|
2,543
|
|
|
—
|
|
|
7,120
|
|
|||||
Goodwill
|
—
|
|
|
11,067
|
|
|
33,757
|
|
|
—
|
|
|
44,824
|
|
|||||
Investments in subsidiaries
|
66,034
|
|
|
80,426
|
|
|
—
|
|
|
(146,460
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,222
|
|
|
56,227
|
|
|
—
|
|
|
59,449
|
|
|||||
Long-term lending due from affiliates
|
—
|
|
|
1,700
|
|
|
2,029
|
|
|
(3,729
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
515
|
|
|
1,058
|
|
|
—
|
|
|
1,573
|
|
|||||
TOTAL ASSETS
|
$
|
66,169
|
|
|
$
|
108,664
|
|
|
$
|
103,479
|
|
|
$
|
(158,080
|
)
|
|
$
|
120,232
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper and other short-term debt
|
$
|
—
|
|
|
$
|
448
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
460
|
|
Current portion of long-term debt
|
—
|
|
|
2,577
|
|
|
166
|
|
|
—
|
|
|
2,743
|
|
|||||
Short-term lending due to affiliates
|
—
|
|
|
3,816
|
|
|
1,598
|
|
|
(5,414
|
)
|
|
—
|
|
|||||
Trade payables
|
—
|
|
|
2,718
|
|
|
1,731
|
|
|
—
|
|
|
4,449
|
|
|||||
Payables due to affiliates
|
—
|
|
|
207
|
|
|
716
|
|
|
(923
|
)
|
|
—
|
|
|||||
Accrued marketing
|
—
|
|
|
236
|
|
|
444
|
|
|
—
|
|
|
680
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
1,571
|
|
|
(1,419
|
)
|
|
152
|
|
|||||
Interest payable
|
—
|
|
|
404
|
|
|
15
|
|
|
—
|
|
|
419
|
|
|||||
Dividends due to affiliates
|
—
|
|
|
135
|
|
|
—
|
|
|
(135
|
)
|
|
—
|
|
|||||
Other current liabilities
|
135
|
|
|
473
|
|
|
570
|
|
|
—
|
|
|
1,178
|
|
|||||
Total current liabilities
|
135
|
|
|
11,014
|
|
|
6,874
|
|
|
(7,891
|
)
|
|
10,132
|
|
|||||
Long-term debt
|
—
|
|
|
27,442
|
|
|
891
|
|
|
—
|
|
|
28,333
|
|
|||||
Long-term borrowings due to affiliates
|
—
|
|
|
2,029
|
|
|
1,919
|
|
|
(3,948
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
1,245
|
|
|
12,831
|
|
|
—
|
|
|
14,076
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
184
|
|
|
243
|
|
|
—
|
|
|
427
|
|
|||||
Other liabilities
|
—
|
|
|
716
|
|
|
301
|
|
|
—
|
|
|
1,017
|
|
|||||
TOTAL LIABILITIES
|
135
|
|
|
42,630
|
|
|
23,059
|
|
|
(11,839
|
)
|
|
53,985
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Total shareholders’ equity
|
66,034
|
|
|
66,034
|
|
|
80,207
|
|
|
(146,241
|
)
|
|
66,034
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
207
|
|
|
—
|
|
|
207
|
|
|||||
TOTAL EQUITY
|
66,034
|
|
|
66,034
|
|
|
80,414
|
|
|
(146,241
|
)
|
|
66,241
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
66,169
|
|
|
$
|
108,664
|
|
|
$
|
103,479
|
|
|
$
|
(158,080
|
)
|
|
$
|
120,232
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,830
|
|
|
$
|
1,374
|
|
|
$
|
—
|
|
|
$
|
4,204
|
|
Trade receivables
|
—
|
|
|
12
|
|
|
757
|
|
|
—
|
|
|
769
|
|
|||||
Receivables due from affiliates
|
—
|
|
|
712
|
|
|
111
|
|
|
(823
|
)
|
|
—
|
|
|||||
Dividends due from affiliates
|
39
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|||||
Sold receivables
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Income taxes receivable
|
—
|
|
|
1,959
|
|
|
10
|
|
|
(1,709
|
)
|
|
260
|
|
|||||
Inventories
|
—
|
|
|
1,759
|
|
|
925
|
|
|
—
|
|
|
2,684
|
|
|||||
Short-term lending due from affiliates
|
—
|
|
|
1,722
|
|
|
2,956
|
|
|
(4,678
|
)
|
|
—
|
|
|||||
Other current assets
|
—
|
|
|
270
|
|
|
437
|
|
|
—
|
|
|
707
|
|
|||||
Total current assets
|
39
|
|
|
9,264
|
|
|
6,699
|
|
|
(7,249
|
)
|
|
8,753
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
4,447
|
|
|
2,241
|
|
|
—
|
|
|
6,688
|
|
|||||
Goodwill
|
—
|
|
|
11,067
|
|
|
33,058
|
|
|
—
|
|
|
44,125
|
|
|||||
Investments in subsidiaries
|
57,358
|
|
|
70,877
|
|
|
—
|
|
|
(128,235
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,364
|
|
|
55,933
|
|
|
—
|
|
|
59,297
|
|
|||||
Long-term lending due from affiliates
|
—
|
|
|
1,700
|
|
|
2,000
|
|
|
(3,700
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
501
|
|
|
1,116
|
|
|
—
|
|
|
1,617
|
|
|||||
TOTAL ASSETS
|
$
|
57,397
|
|
|
$
|
101,220
|
|
|
$
|
101,047
|
|
|
$
|
(139,184
|
)
|
|
$
|
120,480
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper and other short-term debt
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
645
|
|
Current portion of long-term debt
|
—
|
|
|
2,032
|
|
|
14
|
|
|
—
|
|
|
2,046
|
|
|||||
Short-term lending due to affiliates
|
—
|
|
|
2,956
|
|
|
1,722
|
|
|
(4,678
|
)
|
|
—
|
|
|||||
Trade payables
|
—
|
|
|
2,376
|
|
|
1,620
|
|
|
—
|
|
|
3,996
|
|
|||||
Payables due to affiliates
|
—
|
|
|
111
|
|
|
712
|
|
|
(823
|
)
|
|
—
|
|
|||||
Accrued marketing
|
—
|
|
|
277
|
|
|
472
|
|
|
—
|
|
|
749
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
144
|
|
|
13
|
|
|
—
|
|
|
157
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
1,964
|
|
|
(1,709
|
)
|
|
255
|
|
|||||
Interest payable
|
—
|
|
|
401
|
|
|
14
|
|
|
—
|
|
|
415
|
|
|||||
Dividends due to affiliates
|
—
|
|
|
39
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|||||
Other current liabilities
|
39
|
|
|
588
|
|
|
611
|
|
|
—
|
|
|
1,238
|
|
|||||
Total current liabilities
|
39
|
|
|
9,566
|
|
|
7,145
|
|
|
(7,249
|
)
|
|
9,501
|
|
|||||
Long-term debt
|
—
|
|
|
28,736
|
|
|
977
|
|
|
—
|
|
|
29,713
|
|
|||||
Long-term borrowings due to affiliates
|
—
|
|
|
2,000
|
|
|
1,902
|
|
|
(3,902
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
1,382
|
|
|
19,466
|
|
|
—
|
|
|
20,848
|
|
|||||
Accrued postemployment costs
|
—
|
|
|
1,754
|
|
|
284
|
|
|
—
|
|
|
2,038
|
|
|||||
Other liabilities
|
—
|
|
|
424
|
|
|
382
|
|
|
—
|
|
|
806
|
|
|||||
TOTAL LIABILITIES
|
39
|
|
|
43,862
|
|
|
30,156
|
|
|
(11,151
|
)
|
|
62,906
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
57,358
|
|
|
57,358
|
|
|
70,675
|
|
|
(128,033
|
)
|
|
57,358
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
216
|
|
|||||
TOTAL EQUITY
|
57,358
|
|
|
57,358
|
|
|
70,891
|
|
|
(128,033
|
)
|
|
57,574
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
57,397
|
|
|
$
|
101,220
|
|
|
$
|
101,047
|
|
|
$
|
(139,184
|
)
|
|
$
|
120,480
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by/(used for) operating activities
|
$
|
2,888
|
|
|
$
|
1,499
|
|
|
$
|
(972
|
)
|
|
$
|
(2,888
|
)
|
|
$
|
527
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash receipts on sold receivables
|
—
|
|
|
—
|
|
|
2,286
|
|
|
—
|
|
|
2,286
|
|
|||||
Capital expenditures
|
—
|
|
|
(757
|
)
|
|
(460
|
)
|
|
—
|
|
|
(1,217
|
)
|
|||||
Proceeds from net investment hedges
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Net proceeds from/(payments on) intercompany lending activities
|
—
|
|
|
641
|
|
|
(542
|
)
|
|
(99
|
)
|
|
—
|
|
|||||
Additional investments in subsidiaries
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
58
|
|
|
23
|
|
|
—
|
|
|
81
|
|
|||||
Net cash provided by/(used for) investing activities
|
(22
|
)
|
|
(52
|
)
|
|
1,307
|
|
|
(77
|
)
|
|
1,156
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of long-term debt
|
—
|
|
|
(2,632
|
)
|
|
(12
|
)
|
|
—
|
|
|
(2,644
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,496
|
|
|
—
|
|
|
—
|
|
|
1,496
|
|
|||||
Debt issuance costs
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Net proceeds from/(payments on) intercompany borrowing activities
|
—
|
|
|
542
|
|
|
(641
|
)
|
|
99
|
|
|
—
|
|
|||||
Proceeds from issuance of commercial paper
|
—
|
|
|
6,043
|
|
|
—
|
|
|
—
|
|
|
6,043
|
|
|||||
Repayments of commercial paper
|
—
|
|
|
(6,249
|
)
|
|
—
|
|
|
—
|
|
|
(6,249
|
)
|
|||||
Dividends paid-Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends paid-common stock
|
(2,888
|
)
|
|
(2,888
|
)
|
|
—
|
|
|
2,888
|
|
|
(2,888
|
)
|
|||||
Redemption of Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other intercompany capital stock transactions
|
—
|
|
|
22
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||||
Other financing activities, net
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Net cash provided by/(used for) financing activities
|
(2,866
|
)
|
|
(3,672
|
)
|
|
(653
|
)
|
|
2,965
|
|
|
(4,226
|
)
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase/(decrease)
|
—
|
|
|
(2,225
|
)
|
|
(261
|
)
|
|
—
|
|
|
(2,486
|
)
|
|||||
Balance at beginning of period
|
—
|
|
|
2,869
|
|
|
1,386
|
|
|
—
|
|
|
4,255
|
|
|||||
Balance at end of period
|
$
|
—
|
|
|
$
|
644
|
|
|
$
|
1,125
|
|
|
$
|
—
|
|
|
$
|
1,769
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by/(used for) operating activities
|
$
|
3,097
|
|
|
$
|
4,369
|
|
|
$
|
(1,705
|
)
|
|
$
|
(3,112
|
)
|
|
$
|
2,649
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash receipts on sold receivables
|
—
|
|
|
—
|
|
|
2,589
|
|
|
—
|
|
|
2,589
|
|
|||||
Capital expenditures
|
—
|
|
|
(923
|
)
|
|
(324
|
)
|
|
—
|
|
|
(1,247
|
)
|
|||||
Proceeds from net investment hedges
|
—
|
|
|
104
|
|
|
(13
|
)
|
|
—
|
|
|
91
|
|
|||||
Net proceeds from/(payments on) intercompany lending activities
|
—
|
|
|
690
|
|
|
37
|
|
|
(727
|
)
|
|
—
|
|
|||||
Additional investments in subsidiaries
|
55
|
|
|
(10
|
)
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|||||
Return of capital
|
8,987
|
|
|
—
|
|
|
—
|
|
|
(8,987
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
25
|
|
|
(6
|
)
|
|
—
|
|
|
19
|
|
|||||
Net cash provided by/(used for) investing activities
|
9,042
|
|
|
(114
|
)
|
|
2,283
|
|
|
(9,759
|
)
|
|
1,452
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of long-term debt
|
—
|
|
|
(72
|
)
|
|
(14
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
6,978
|
|
|
3
|
|
|
—
|
|
|
6,981
|
|
|||||
Debt issuance costs
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|||||
Net proceeds from/(payments on) intercompany borrowing activities
|
—
|
|
|
(37
|
)
|
|
(690
|
)
|
|
727
|
|
|
—
|
|
|||||
Proceeds from issuance of commercial paper
|
—
|
|
|
6,680
|
|
|
—
|
|
|
—
|
|
|
6,680
|
|
|||||
Repayments of commercial paper
|
—
|
|
|
(6,043
|
)
|
|
—
|
|
|
—
|
|
|
(6,043
|
)
|
|||||
Dividends paid-Series A Preferred Stock
|
(180
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
|||||
Dividends paid-common stock
|
(3,584
|
)
|
|
(3,764
|
)
|
|
(16
|
)
|
|
3,780
|
|
|
(3,584
|
)
|
|||||
Redemption of Series A Preferred Stock
|
(8,320
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,320
|
)
|
|||||
Other intercompany capital stock transactions
|
—
|
|
|
(8,374
|
)
|
|
10
|
|
|
8,364
|
|
|
—
|
|
|||||
Other financing activities, net
|
(55
|
)
|
|
47
|
|
|
(8
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Net cash provided by/(used for) financing activities
|
(12,139
|
)
|
|
(4,638
|
)
|
|
(715
|
)
|
|
12,871
|
|
|
(4,621
|
)
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
(137
|
)
|
|||||
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase/(decrease)
|
—
|
|
|
(383
|
)
|
|
(274
|
)
|
|
—
|
|
|
(657
|
)
|
|||||
Balance at beginning of period
|
—
|
|
|
3,252
|
|
|
1,660
|
|
|
—
|
|
|
4,912
|
|
|||||
Balance at end of period
|
$
|
—
|
|
|
$
|
2,869
|
|
|
$
|
1,386
|
|
|
$
|
—
|
|
|
$
|
4,255
|
|
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by/(used for) operating activities
|
$
|
632
|
|
|
$
|
1,363
|
|
|
$
|
64
|
|
|
$
|
(787
|
)
|
|
$
|
1,272
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash receipts on sold receivables
|
—
|
|
|
—
|
|
|
1,331
|
|
|
—
|
|
|
1,331
|
|
|||||
Capital expenditures
|
—
|
|
|
(400
|
)
|
|
(248
|
)
|
|
—
|
|
|
(648
|
)
|
|||||
Proceeds from net investment hedges
|
—
|
|
|
488
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|||||
Net proceeds from/(payments on) intercompany lending activities
|
—
|
|
|
737
|
|
|
(721
|
)
|
|
(16
|
)
|
|
—
|
|
|||||
Payments to acquire Kraft Foods Group, Inc., net of cash acquired
|
—
|
|
|
(9,535
|
)
|
|
67
|
|
|
—
|
|
|
(9,468
|
)
|
|||||
Additional investments in subsidiaries
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|||||
Return of capital
|
1,570
|
|
|
5
|
|
|
—
|
|
|
(1,575
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
(2
|
)
|
|
(10
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Net cash provided by/(used for) investing activities
|
(8,430
|
)
|
|
(8,707
|
)
|
|
419
|
|
|
8,409
|
|
|
(8,309
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of long-term debt
|
—
|
|
|
(12,284
|
)
|
|
(30
|
)
|
|
—
|
|
|
(12,314
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
14,032
|
|
|
802
|
|
|
—
|
|
|
14,834
|
|
|||||
Debt prepayment and extinguishment costs
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|||||
Debt issuance costs
|
—
|
|
|
(94
|
)
|
|
(4
|
)
|
|
—
|
|
|
(98
|
)
|
|||||
Net proceeds from/(payments on) intercompany borrowing activities
|
—
|
|
|
721
|
|
|
(737
|
)
|
|
16
|
|
|
—
|
|
|||||
Proceeds from issuance of common stock to Sponsors
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|||||
Dividends paid-Series A Preferred Stock
|
(900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(900
|
)
|
|||||
Dividends paid-common stock
|
(1,302
|
)
|
|
(2,202
|
)
|
|
(155
|
)
|
|
2,357
|
|
|
(1,302
|
)
|
|||||
Other intercompany capital stock transactions
|
—
|
|
|
10,000
|
|
|
(5
|
)
|
|
(9,995
|
)
|
|
—
|
|
|||||
Other financing activities, net
|
—
|
|
|
(12
|
)
|
|
(56
|
)
|
|
—
|
|
|
(68
|
)
|
|||||
Net cash provided by/(used for) financing activities
|
7,798
|
|
|
10,056
|
|
|
(185
|
)
|
|
(7,622
|
)
|
|
10,047
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
—
|
|
|
—
|
|
|
(408
|
)
|
|
—
|
|
|
(408
|
)
|
|||||
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase/(decrease)
|
—
|
|
|
2,712
|
|
|
(110
|
)
|
|
—
|
|
|
2,602
|
|
|||||
Balance at beginning of period
|
—
|
|
|
540
|
|
|
1,770
|
|
|
—
|
|
|
2,310
|
|
|||||
Balance at end of period
|
$
|
—
|
|
|
$
|
3,252
|
|
|
$
|
1,660
|
|
|
$
|
—
|
|
|
$
|
4,912
|
|
|
December 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
509
|
|
|
$
|
1,120
|
|
|
$
|
—
|
|
|
$
|
1,629
|
|
Restricted cash included in other assets (current)
|
—
|
|
|
135
|
|
|
5
|
|
|
—
|
|
|
140
|
|
|||||
Cash, cash equivalents, and restricted cash
|
$
|
—
|
|
|
$
|
644
|
|
|
$
|
1,125
|
|
|
$
|
—
|
|
|
$
|
1,769
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Parent Guarantor
|
|
Subsidiary Issuer
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,830
|
|
|
$
|
1,374
|
|
|
$
|
—
|
|
|
$
|
4,204
|
|
Restricted cash included in other assets (current)
|
—
|
|
|
39
|
|
|
3
|
|
|
—
|
|
|
42
|
|
|||||
Restricted cash included in other assets (noncurrent)
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Cash, cash equivalents, and restricted cash
|
$
|
—
|
|
|
$
|
2,869
|
|
|
$
|
1,386
|
|
|
$
|
—
|
|
|
$
|
4,255
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;
|
•
|
provide reasonable assurance that receipts and expenditures are being made only in accordance with management and director authorization; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(1)
|
|
Weighted average exercise price per share of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
Plan Category
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
21,396,351
|
|
|
$
|
41.63
|
|
|
48,723,411
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
21,396,351
|
|
|
|
|
48,723,411
|
|
|
Page No.
|
Exhibit No.
|
|
Descriptions
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|
2.5
|
|
|
2.6
|
|
2.7
|
|
|
2.8
|
|
|
2.9
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
4.12
|
|
|
4.13
|
|
|
4.14
|
|
|
4.15
|
|
|
4.16
|
|
|
4.17
|
|
|
4.18
|
|
|
4.19
|
|
|
4.20
|
|
|
4.21
|
|
|
4.22
|
|
|
4.23
|
|
|
4.24
|
|
|
4.25
|
|
|
4.26
|
|
4.27
|
|
|
4.28
|
|
|
4.29
|
|
|
4.30
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
21.1
|
|
|
23.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.1
|
|
The following materials from The Kraft Heinz Company’s Annual Report on Form 10-K for the year ended December 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Balance Sheets, (v) the Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.
|
|
|
|
+
|
|
The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.
|
++
|
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
The Kraft Heinz Company
|
|
Date:
|
February 16, 2018
|
|
|
|
|
By:
|
/s/ David H. Knopf
|
|
|
|
David H. Knopf
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Bernardo Hees
|
|
Chief Executive Officer
|
|
February 16, 2018
|
Bernardo Hees
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ David H. Knopf
|
|
Executive Vice President and Chief Financial Officer
|
|
February 16, 2018
|
David H. Knopf
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Christopher R. Skinger
|
|
Vice President, Global Controller
|
|
February 16, 2018
|
Christopher R. Skinger
|
|
(Principal Accounting Officer)
|
|
|
Alexandre Behring*
|
|
Chairman of the Board
|
|
|
|
John T. Cahill*
|
|
Vice Chairman of the Board
|
|
|
|
Gregory E. Abel*
|
|
Director
|
|
|
|
Warren E. Buffett*
|
|
Director
|
|
|
|
Tracy Britt Cool*
|
|
Director
|
|
|
|
Feroz Dewan*
|
|
Director
|
|
|
|
Jeanne P. Jackson*
|
|
Director
|
|
|
|
Jorge Paulo Lemann*
|
|
Director
|
|
|
|
Mackey J. McDonald*
|
|
Director
|
|
|
|
John C. Pope*
|
|
Director
|
|
|
|
Marcel Herrmann Telles*
|
|
Director
|
*By:
|
/s/ David H. Knopf
|
|
David H. Knopf
|
|
Attorney-In-Fact
|
|
February 16, 2018
|
|
|
|
Additions
|
|
Deductions
|
|
|
||||||||||||
Description
|
Balance at Beginning of Period
|
|
Charged to Costs and Expenses
|
|
Charged to Other Accounts
(a)
|
|
Write-offs and Reclassifications
|
|
Balance at End of Period
|
||||||||||
Year ended
December 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances related to trade accounts receivable
|
$
|
20
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
23
|
|
Allowances related to deferred taxes
|
89
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
80
|
|
|||||
|
$
|
109
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
103
|
|
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances related to trade accounts receivable
|
$
|
32
|
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
14
|
|
|
$
|
20
|
|
Allowances related to deferred taxes
|
83
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|||||
|
$
|
115
|
|
|
$
|
12
|
|
|
$
|
(4
|
)
|
|
$
|
14
|
|
|
$
|
109
|
|
Year ended January 3, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances related to trade accounts receivable
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
32
|
|
Allowances related to deferred taxes
|
64
|
|
|
10
|
|
|
12
|
|
|
3
|
|
|
83
|
|
|||||
|
$
|
72
|
|
|
$
|
15
|
|
|
$
|
32
|
|
|
$
|
4
|
|
|
$
|
115
|
|
(a)
|
Primarily relates to acquisitions and currency translation.
|
By:
|
/s/ John T. Cahill
|
|
John T. Cahill
|
By:
|
/s/ Bernardo Hees
|
|
By:
|
/s/ James J. Savina
|
|
Bernardo Hees
|
|
|
James J. Savina
|
|
Chief Executive Officer
|
|
|
SVP, General Counsel and Corporate Secretary
|
Termination Without Cause, death and Disability:
|
|
|
THE KRAFT HEINZ COMPANY
|
Vesting Event
|
Settlement Period
|
Vesting Date
|
As soon as practicable and no later than 60 days following the Vesting Date
|
Termination of Service Without Cause
|
Within 60 days of your termination date*
|
Retirement
|
Within 60 days of your termination date*
|
Disability
|
Within 60 days of your termination date*
|
Death
|
Within 60 days of the date of death
|
1.
|
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
During the course of Executive's Service, Executive will have access to Confidential Information. For purposes of this Agreement, "
Confidential Information
" means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, raw partners and/or competitors of the Company. Executive agrees that Executive shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of Executive's assigned duties and for the benefit of the Company, either during the period of Executive's Service or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company's part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by Executive during Executive's Service. The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to Executive; (ii) becomes generally known to the public subsequent to disclosure to Executive through no wrongful act of Executive or any representative of Executive; or (iii) Executive is required to disclose by applicable law, regulation or legal process (provided that, to the extent permitted by law, Executive provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).
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2.
|
NON-COMPETITION.
Executive acknowledges that (i) Executive performs services of a unique nature for the Company that are irreplaceable, and that Executive's performance of such services to a competing business will result in irreparable harm to the Company, (ii) Executive has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company, (iii) in the course of Executive's employment by or service to a competitor, Executive would inevitably use or disclose such Confidential Information, (iv) the Company has substantial relationships with its customers and Executive has had and will continue to have access to these customers, (v) Executive has received and will receive specialized training from the Company, and (vi) Executive has generated and will continue to generate goodwill for the Company in the course of Executive's Service. Accordingly, during Executive's Service and for eighteen (18) months following a termination of Executive's Service for any reason (the "
Restricted Period
"), Executive will not engage in any business activities, directly or indirectly (whether as an employee, consultant, officer, director, partner, joint venturer, manager, member, principal, agent, or independent contractor, individually, in concert with others, or in any other manner) within the same line or lines of business for which the Executive performed services for the Company and in a capacity that is similar to the capacity in which the Executive was employed by the Company with any person or entity that competes with the Company in the consumer packaged food and beverage industry ("
Competitive Business
") anywhere within the same geographic territory(ies) for which the Executive performed services for the Company (the "
Restricted Territory
"). Notwithstanding the foregoing, nothing herein shall prohibit Executive from being a passive owner of not more than three percent (3%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company, so long as Executive has no active participation in the business of such corporation.
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3.
|
NON-SOLICITATION.
During the Restricted Period, Executive agrees that Executive shall not, except in the furtherance of Executive's duties to the Company, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid, induce, assist in the solicitation of, or accept any business (other than on behalf of the Company) from, any customer or potential customer of the Company to purchase goods or services then sold by the Company from another person, firm, corporation or other entity or, directly or indirectly, in any way request, suggest or advise any such customer to withdraw or cancel any of their business or refuse to continue to do business with the Company. This restriction shall apply to customers or potential customers who, during the two (2) years immediately preceding the Executive's termination, had been assigned to the Executive by the Company, or with which the Executive had contact on behalf of the Company while an Executive of the Company, or about which the Executive had access to confidential information by virtue of Executive's employment with the Company.
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4.
|
NON-INTERFERENCE
. During the Restricted Period, Executive agrees that Executive shall not, except in the furtherance of Executive's duties to the Company, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, (A) solicit, aid or induce any employee, representative or agent of the Company to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company and its vendors, suppliers or customers. As used herein, the term "solicit, aid or induce" includes, but is not limited to, (i) initiating communications with a Company employee relating to possible employment, (ii) offering bonuses or other compensation to encourage a Company employee to terminate his or her employment with the Company and accept employment with any entity, (iii) recommending a Company employee to any entity, and (iv) aiding an entity in recruitment of a Company employee. An employee, representative or agent shall be deemed covered by this
Section 4
while so employed or retained and for a period of six (6) months thereafter.
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5.
|
NON-DISPARAGEMENT.
Executive agrees not to make negative comments or otherwise disparage the Company or its officers, directors, employees, shareholders, agents or products or services. The foregoing shall not be violated by truthful statements made in (a) response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) or (b) the good faith performance of Executive's duties to the Company.
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6.
|
INVENTIONS.
|
a.
|
Executive acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, methods, works of authorship and other work product ("
Inventions
"), whether patentable or unpatentable, (A) that are reduced to practice, created, invented, designed, developed, contributed to, or improved with the use of any Company resources and/or within the scope of Executive's work with the Company or that relate to the business, operations or actual or demonstrably anticipated research or development of the Company, and that are made or conceived by Executive, solely or jointly with others, during Executive's Service, or (B) suggested by any work that Executive performs in connection with the Company, either while performing Executive's duties with the Company or on Executive's own time, but only insofar as the Inventions are related to Executive's work as an employee or other service provider to the Company, shall belong exclusively to the Company (or its designee), whether or not patent or other applications for intellectual property protection are filed thereon. Executive will keep full and complete written records (the "
Records
"), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and Executive will surrender them upon the termination of Service, or upon the Company's request. Executive irrevocably conveys, transfers and assigns to the Company the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to Executive's Service, together with the right to file, in Executive's name or in the name of the Company (or its designee), applications for patents and equivalent rights (the "
Applications
"). Executive will, at any time during and subsequent to Executive's Service, make such applications, sign such papers, take all rightful oaths, and perform all other acts as may be requested from time to time by the Company to perfect, record, enforce, protect, patent or register the Company's rights in the Inventions, all without additional compensation to Executive from the Company. Executive will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys all reasonable assistance (including the giving of testimony) to obtain the Inventions for the Company's benefit, all without additional compensation to Executive from the Company, but entirely at the Company's expense.
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b.
|
In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company and Executive agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to Executive. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Company, Executive hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of Executive's right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, Executive hereby waives any so-called "moral rights" with respect to the Inventions.
To the extent that Executive has any rights in the results and proceeds of Executive's service to the Company that cannot be assigned in the manner described herein, Executive agrees to unconditionally waive the enforcement of such rights. Executive hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to Executive's benefit by virtue of Executive being an employee of or other service provider to the Company.
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7.
|
RETURN OF COMPANY PROPERTY.
On the date of Executive's termination of Service with the Company for any reason (or at any time prior thereto at the Company's request), Executive shall return all property belonging to the Company (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company).
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8.
|
REASONABLENESS OF COVENANTS.
In signing this Agreement, including by electronic means, Executive gives the Company assurance that Executive has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed by it. Executive agrees that these restraints are necessary for the reasonable and proper protection of the Company and its Confidential Information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent Executive from obtaining other suitable employment during the period in which Executive is bound by the restraints. Executive acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and that Executive has sufficient assets and skills to provide a livelihood while such covenants remain in force. Executive further covenants that Executive will not challenge the reasonableness or enforceability of any of the covenants set forth in this Agreement, and that Executive will reimburse the Company for all costs (including reasonable attorneys' fees) incurred in connection with any action to enforce any of the provisions of this Agreement if either the Company prevails on any material issue involved in such dispute or if Executive challenges the reasonableness or enforceability of any of the provisions of this Agreement.
It is also agreed that the "Company" as used in this Agreement refers to each of the Company's Subsidiaries and Affiliates and that each of the Company's s Subsidiaries and Affiliates will have the right to enforce all of Executive's obligations to that Subsidiary or Affiliate under this Agreement, as applicable, subject to any limitation or restriction on such rights of the Subsidiary or Affiliate under applicable law.
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9.
|
REFORMATION.
If it is determined by a court of competent jurisdiction in any state or country that any restriction in this Agreement is excessive in duration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state or country.
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10.
|
REMEDIES
. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Agreement would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond or other security, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages, in addition to any other equitable relief (including without limitation an accounting and/or disgorgement) and/or any other damages as a matter of law.
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11.
|
REPURCHASE
. Executive acknowledges and agrees that a breach of this Agreement would constitute a "Covenant Breach" as such term is used in the Plan and therefore, in the event of a Covenant Breach, Executive's RSU and the Award Stock issued therefor (as such terms are defined in the Plan) shall be subject to repurchase by The Kraft Heinz Company in accordance with the terms of the Plan.
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12.
|
TOLLING.
In the event of any violation of the provisions of this Agreement, Executive acknowledges and agrees that the post-termination restrictions contained in this Agreement shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.
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13.
|
SURVIVAL OF PROVISIONS.
The obligations contained in this Agreement
hereof shall survive the termination or expiration of the Executive's Service with the Company and shall be fully enforceable thereafter.
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14.
|
VENUE, PERSONAL JURISDICTION, AND COVENANT NOT TO SUE
. Executive expressly agrees to submit to the exclusive jurisdiction and exclusive venue of courts located in the State of Delaware in connection with any litigation which may be brought with respect to a dispute between the Company and Executive in relation to this Restrictive Covenants Agreement, regardless of where Executive resides or where Executive performs services for the Company. Executive hereby irrevocably waives Executive's rights, if any, to have any disputes between the Company and Executive related to this Restrictive Covenants Agreement decided in any jurisdiction or venue other than a court in the State of Delaware. Executive hereby waives, to the fullest extent permitted by applicable law, any objection which Executive now or hereafter may have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding, and Executive agrees not to plead or claim the same. Executive further irrevocably covenants not to sue the Company related to this Restrictive Covenants Agreement in any jurisdiction or venue other than a court in the State of Delaware. All matters relating to the interpretation, construction, application, validity, and enforcement of this Agreement, and any disputes or controversies arising hereunder, will be governed by the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule, whether of the State of Delaware or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Delaware.
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1.
|
Grant of Performance Share Award.
|
(a)
|
Performance Share Award
. In consideration of the Participant’s agreement to provide services to The Kraft Heinz Company, a corporation organized under the laws of Delaware (the “
Company
”), or any of its Affiliates, and, as applicable, in consideration for the Participant’s agreement to the non-competition and non-solicitation covenants provided in the attached Exhibit B, and for other good and valuable consideration, the Company hereby grants as of the date set forth in the Performance Share Award Notice (referred to as the “
Notice
”) to the Participant named in the Notice (the “
Participant
”) a Performance Share Award with respect to the Performance Period set forth in the Notice, subject to the terms and provisions of the Notice, this Performance Share Award Agreement, including any appendices (this “
Agreement
”), and the Company’s 2016 Omnibus Incentive Plan, as amended from time to time (the “
Omnibus Plan
”). Unless and until the Performance Share Award becomes payable in the manner set forth in Section 3 hereof, the Participant shall have no right to payment of the Performance Share Award. Prior to payment of the Performance Share Award, the Performance Share Award shall represent an unsecured obligation of the Company, payable (if at all) from the general assets of the Company.
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(i)
|
Incorporation of Terms and Conditions
. The Performance Share Award and this Agreement are subject to the terms and conditions of the Omnibus Plan, which are incorporated herein by reference. In the event of any inconsistency between the Omnibus Plan and this Agreement, the terms of the Omnibus Plan shall control.
|
(ii)
|
Performance Targets
. The Committee, in its sole discretion, shall have the authority to determine, establish and adjust Performance Periods, establish the applicable Performance Targets, adjust the applicable Performance Targets and certify the attainment of Performance Targets.
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2.
|
Definitions
. All capitalized terms used in this Agreement without definition shall have the meanings ascribed in the Omnibus Plan and the Notice. The following terms shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
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(a)
|
“
Disability
” means (i) a physical or mental condition entitling you to benefits under the long-term disability policy of the Company covering you or (ii) in the absence of any such policy, a physical or mental condition rendering you unable to perform your duties for the Company or any of its Subsidiaries or Affiliates for a period of six (6) consecutive months or longer; provided that if you are a party to an Employment Agreement at the time of termination of your Service and such Employment Agreement contains a different definition of “disability” (or any derivation thereof), the definition in such Employment Agreement shall control for purposes of this Agreement.
|
(b)
|
“
Employment Agreement
” means an individual written employment agreement between the Participant and the Company or any of its Affiliates, including an offer letter.
|
(c)
|
“
Performance Share Award Share Payout
” means an amount equal to the Payout or other calculation included in the Notice or Employment Agreement.
|
(d)
|
“
Performance Share Award Target
” shall mean the target number of Shares subject to this Performance Share Award set forth in the Notice or Employment Agreement.
|
(e)
|
“
Retirement
” means a termination of Service by you on or after the later of (i) your 65th birthday and (ii) your completion of five (5) years of Service with the Company, its Subsidiaries or its Affiliates.
|
(f)
|
“
Without Cause
” means (i) a termination of your Service by the Company or its Subsidiaries or Affiliates other than for Cause (as defined in the Omnibus Plan) and other than due to your death, Disability or Retirement or (ii) (A) if you are a party to an Employment Agreement , (B) such Employment Agreement is in effect upon the date of your termination of Service and (C) such Employment Agreement defines “Good Reason”, then “Without Cause” shall also include resignation of your Service for “Good Reason” in accordance with such Employment Agreement .
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3.
|
Payment.
|
(a)
|
Form and Time of Payment.
|
(i)
|
Vesting
. The Performance Share Award will vest on the “Vesting Date” set forth in the Notice subject to your continued Service with the Company or one of its Subsidiaries, except as otherwise set forth in the Omnibus Plan or this Award Agreement. Prior to the vesting and settlement of the Performance Share Award, you will not have any rights of a shareholder with respect to the Performance Share Award or the Shares subject thereto. No Shares will be delivered pursuant to the vesting of the Performance Share Award unless (i) you have complied with your obligations under this Award Agreement and the Omnibus Plan and (ii) the vesting of the Performance Share Award and the delivery of such Shares complies with applicable law. Until such time as the Shares are delivered to you (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), you will have no right to vote or receive dividends or any other rights as a shareholder with respect to such Shares, notwithstanding the vesting of the Performance Share Award.
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(ii)
|
Performance Share Award Payment
. Subject to the terms of the Omnibus Plan and this Agreement, any Performance Share Award that becomes payable shall be made in whole Shares, which shall be issued in book-entry form, registered in the Participant’s name. In the event the Performance Share Award Share Payout is to be made in Shares results in less than a whole number of Shares, the Performance Share Award Share Payout shall be rounded up or down to the next whole Share (no fractional Shares shall be issued in payment of a Performance Share Award). Any Shares issued in respect of a Performance Share Award Share Payout shall be issued pursuant to the terms and conditions of the Omnibus Plan and shall reduce the number of Shares available for issuance thereunder.
|
(iii)
|
Dividends
. Any cash dividend the Board declares with respect to the Shares during the Performance Period shall be treated in accordance with the Notice.
|
(iv)
|
Payment Timing
. Except as otherwise provided in Section 21 hereof or in the Notice, as applicable, (A) the Performance Share Award payment shall be made as soon as practicable following the Vesting Date, but in any event no later than March 15 of the taxable year following such date and (B) a Performance Share Award that becomes payable due to a termination Without Cause, or termination due to your Retirement, death or Disability, shall be paid no later than 60 days after the Vesting Date.
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(v)
|
Payout Upon Termination
. The Notice shall set forth the effect of termination upon the Performance Share Award. If you are terminated Without Cause or due to your resignation and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, subject to anything to the contrary that may be contained in the Notice at the time of termination of your Service, your Service will, at the election of the Company, be deemed to have been terminated for Cause for purposes of this Award Agreement and the Omnibus Plan, effective as of the date the events giving rise to Cause occurred and any consequences following from a termination for Cause shall be retroactively applied (including your obligation to repay gains that would not have been realized had your Service been terminated for Cause).
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(b)
|
Conditions to Payment of Performance Share Award
. Notwithstanding any other provision of this Agreement:
|
(i)
|
The Performance Share Award shall not become payable to the Participant or his or her legal representative unless and until the Participant or his or her legal representative shall have satisfied all applicable withholding obligations for Tax-Related Items (as defined in Section 5 below), if any, in accordance with Section 5 hereof.
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(ii)
|
The Company shall not be required to issue or deliver any Shares in payment of the Performance Share Award prior to the fulfillment of all of the following conditions: (A) the admission of the Shares to listing on all stock exchanges on which the Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission (the “
Commission
”) or other governmental regulatory body, which the Committee shall, in its sole and absolute discretion, deem necessary and advisable, or if the offering of the Shares is not so registered, a determination by the Company that the issuance of the Shares would be exempt from any such registration or qualification requirements, (C) the obtaining of any approval or other clearance from any state, federal or foreign governmental agency that the Committee shall, in its absolute discretion, determine to be necessary or advisable and (D) the lapse of any such reasonable period of time following the date the Performance Share Award becomes payable as the Committee may from time to time establish for reasons of administrative convenience, subject to compliance with Section 409A of the Code.
|
(c)
|
Committee Discretion
. Anything to the contrary in this Section 3 notwithstanding, the Committee may, in its sole discretion, provide for full or partial payment of the Performance Share Award upon termination of a Participant’s active employment for any reason prior to the completion of a Performance Period to which a Performance Share Award relates; provided that the Committee shall not exercise such discretion if doing so would cause other Performance Share Awards that are intended to qualify as Qualified Performance-Based Compensation not to qualify.
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4.
|
Withholding Taxes
. Regardless of any action the Company or the Participant’s employer (the “
Employer
”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the Omnibus Plan and legally applicable to the Participant (“
Tax-Related Items
”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by the Participant is and remains his or her responsibility and may exceed the amount actually withheld by the Company or the Employer. Furthermore, the Participant acknowledges that the Company and/or the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Share Award, including, but not limited to, the grant, vesting, or payment of this Performance Share Award or the subsequent sale of Shares issued in payment of the Performance Share Award; and (b) do not commit to and are under no obligation to structure the terms of the grant of the Performance Share Award or any aspect of the Participant’s participation in the Omnibus Plan to reduce or eliminate his or her liability for Tax-Related Items or achieve any particular tax result. If the Participant becomes subject to Tax-Related Items in more than one jurisdiction between the date of grant and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for (including report) Tax-Related Items in more than one jurisdiction.
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5.
|
Nature of Grant
. By participating in the Omnibus Plan and in exchange for receiving the Performance Share Award, the Participant acknowledges, understands and agrees that:
|
(a)
|
the Omnibus Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Omnibus Plan;
|
(b)
|
the grant of the Performance Share Award is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Share Awards, or benefits in lieu of Performance Share Awards, even if Performance Share Awards have been granted repeatedly in the past;
|
(c)
|
all decisions with respect to future Performance Share Award grants, if any, shall be at the sole discretion of the Board of Directors of the Company or the Committee;
|
(d)
|
the Participant is voluntarily participating in the Omnibus Plan;
|
(e)
|
the Performance Share Award and any Shares subject to the Performance Share Award are not part of or included in any calculation of severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension, retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer, or any Affiliate;
|
(f)
|
the Performance Share Award grant shall not be interpreted to form an employment or service contract or relationship with the Company or any Affiliate;
|
(g)
|
the future value of the underlying Shares is unknown and cannot be predicted with certainty;
|
(h)
|
the Performance Share Award and the benefits evidenced by this Agreement do not create any entitlement, not otherwise specifically determined by the Company in its discretion, to have the Performance Share Award or any such benefits transferred to, or assumed by, another company, or to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and
|
(i)
|
the Performance Share Award and the Shares subject to the Performance Share Award are not intended to replace any pension rights or compensation;
|
(j)
|
the Performance Share Award and the Shares subject to the Performance Share Award are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and are outside the scope of the Participant’s employment or service contract, if any;
|
(k)
|
the Performance Share Award and the Shares subject to the Performance Share Award are not part of normal compensation or salary from the Employer and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Affiliate of the Company;
|
(l)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Share Award resulting from failure to reach Performance Goals or termination of the Participant’s employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of any employment laws in the country where the Participant resides or later found to be invalid), and in consideration of the grant of the Performance Share Award to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company or the Employer, waives his or her ability, if any, to bring any such claim, and releases the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Omnibus Plan, the Participant shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; and
|
(m)
|
neither the Company, the Employer nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the Performance Share Award, any Shares paid to the Participant or any proceeds resulting from the Participant’s sale of such Shares.
|
6.
|
Data Privacy
.
By participating in the Omnibus Plan and in exchange for receiving the Performance Share Award, the Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data as described in this Agreement and any other Performance Share Award grant materials by and among, as applicable, the Employer, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participant’s receipt of the Performance Share Award.
|
7.
|
Nontransferability of Performance Share Award
. The Performance Share Award or the interests or rights therein may not be transferred in any manner other than by will or by the laws of descent and distribution, and may not be assigned, hypothecated or otherwise pledged and shall not be subject to execution, attachment or similar process. Upon any attempt to effect any such disposition, or upon the levy of any such process, in violation of the provisions herein, the Performance Share Award shall immediately become null and void and any rights to receive a payment under the Performance Share Award shall be forfeited.
|
8.
|
Rights as Shareholder
. Neither the Participant nor any person claiming under or through the Participant shall have any of the rights or privileges of a shareholder of the Company in respect of any Shares issuable hereunder unless and until certificates representing such Shares (which may be in uncertificated form) will have been issued and recorded on the books and records of the Company or its transfer agents or registrars, and delivered to the Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, the Participant shall have all the rights of a shareholder of the Company, including with respect to the right to vote the Shares and the right to receive any cash or Share dividends or other distributions paid to or made with respect to the Shares.
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9.
|
Repayment/Forfeiture
. The Award shall be canceled and forfeited, if, without the consent of the Company, while employed by or providing services to the Company or any Subsidiary or after termination of such employment or service, Participant (i) violates a non-competition, non-solicitation or non-disclosure covenant or agreement, (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Subsidiary, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion. In addition, any payments or benefits the Participant may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with the requirements under the Securities Act, the Act, rules promulgated by the Commission or any other applicable law, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any securities exchange on which the Shares are listed or traded, as may be in effect from time to time as well as any policy relating to the repayment or forfeiture of compensation that the Company may adopt from time-to-time. Further, if you receive any amount in excess of what you should have received under the terms of the Performance Share Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or administrative error), all as determined by the Committee, then you shall be required to promptly repay any such excess amount to the Company. Nothing in or about this Agreement prohibits Participant from: (i) filing and, as provided for under Section 21F of the Act, maintaining the confidentiality of a claim with the Commission, (ii) providing the Commission with information that would otherwise violate the non-disclosure restrictions in this Agreement, to the extent permitted by Section 21F of the Act; (iii) cooperating, participating or assisting in a Commission investigation or proceeding without notifying the Company; or (iv) receiving a monetary award as set forth in Section 21F of the Act. Furthermore, Participant is advised that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information (as defined in Exhibit B) that constitutes a trade secret to which the Defend Trade Secrets Act (18 U.S.C. Section 1833(b)) applies that is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made under seal.
|
10.
|
Restrictions on Resale
. The Participant hereby agrees not to sell any Shares issued in payment of the Performance Share Award at a time when applicable laws or Company policies prohibit a sale. This restriction shall apply as long as the Participant’s employment continues and for such period of time after the termination of the Participant’s employment as the Company may specify.
|
11.
|
Language
. If you have received this Award Agreement or any other document related to the Omnibus Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
12.
|
Effect of a Change in Control
. The treatment of a Performance Share Award upon a Change in Control shall be governed by the Omnibus Plan, provided, however, that to the extent that the Performance Share Award constitute Deferred Compensation, settlement of any portion of the Performance Share Award that may vest in connection with a Change in Control will occur within sixty (60) days following the Vesting Date. In the event that there is a conflict between the terms of this Award Agreement regarding the effect of a Change in Control on the Performance Share Award and the terms of any Employment Agreement, the terms of this Award Agreement will govern.
|
13.
|
Securities Laws and Clawback
. By accepting a Performance Share Award, you acknowledge that U.S. federal, state or foreign securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict your right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with the Performance Share Award. You agree to comply with such securities law requirements and Company policies, as such laws and policies are amended from time to time. You also acknowledge that the Performance Share Award may be forfeited if you engage in activity that is in conflict with or adverse to the interest of the Company or any Subsidiary, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion or to the extent that you otherwise violate any policy adopted by the Company relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to you by the Company as such policy is in effect on the date of grant of the applicable Award or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time.
|
14.
|
Adjustments
. The Performance Goals, as well as the manner in which the Performance Share Award payment is calculated is subject to adjustment in the Committee’s sole discretion in accordance with Section 10(b) of the Omnibus Plan and the Notice. The Participant shall be notified of such adjustment and such adjustment shall be binding upon the Company and the Participant.
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15.
|
NO GUARANTEE OF CONTINUED EMPLOYMENT. THE PARTICIPANT HEREBY ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE PERFORMANCE SHARE AWARD PURSUANT TO THE PROVISIONS OF THIS AGREEMENT IS EARNED ONLY IF THE PERFORMANCE GOALS ARE ATTAINED AND THE OTHER TERMS AND CONDITIONS SET FORTH HEREIN ARE SATISFIED AND BY THE PARTICIPANT CONTINUING TO BE EMPLOYED (SUBJECT TO THE PROVISIONS OF SECTION 3(b) HEREOF) AT THE WILL OF THE COMPANY OR AN AFFILIATE (AND NOT THROUGH THE ACT OF BEING EMPLOYED BY THE COMPANY OR AN AFFILIATE, BEING GRANTED A PERFORMANCE SHARE AWARD, OR RECEIVING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE RIGHT TO EARN A PAYMENT UNDER THE PERFORMANCE SHARE AWARD SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT DURING THE PERFORMANCE PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY OR AN AFFILIATE TO TERMINATE THE PARTICIPANT’S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE, AND IN ACCORDANCE WITH APPLICABLE EMPLOYMENT LAWS OF THE COUNTRY WHERE THE PARTICIPANT RESIDES.
|
16.
|
Entire Agreement: Governing Law
. The Notice, the Omnibus Plan and this Agreement, including any appendices, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except as provided in the Notice, the Omnibus Plan or this Agreement or by means of a writing signed by the Company and the Participant. Nothing in the Notice, the Omnibus Plan and this Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Omnibus Plan and this Agreement are to be construed in accordance with and governed by the substantive laws of Delaware, U.S.A., without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the substantive laws of Delaware to the rights and duties of the parties. Unless otherwise provided in the Notice, the Omnibus Plan or this Agreement, the Participant is deemed to submit to the exclusive jurisdiction of Delaware, U.S.A., and agrees that such litigation shall be conducted in the courts of Wilmington County, Delaware, or the federal courts for the United States for the Eastern District of Delaware, where this grant is made and/or to be performed.
|
17.
|
Conformity to Securities Laws
. The Participant acknowledges that the Notice, the Omnibus Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Act, and any and all regulations and rules promulgated thereunder by the Commission, including, without limitation, Rule 16b-3. Notwithstanding anything herein to the contrary, the Notice, the Omnibus Plan and this Agreement shall be administered, and the Performance Share Award is granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Notice, the Omnibus Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
|
18.
|
Administration and Interpretation
. The Performance Share Award, the vesting of the Performance Share Award and any payment of the Performance Share Award are subject to, and shall be administered in accordance with, the provisions of this Agreement, as the same may be amended from time to time. Any question or dispute regarding the administration or interpretation of the Notice, the Omnibus Plan and this Agreement shall be submitted by the Participant or by the Company to the Committee. The resolution of such question or dispute by the Committee shall be final and binding on all persons.
|
19.
|
Headings
. The captions used in the Notice and this Agreement are inserted for convenience and shall not be deemed a part of the Performance Share Award for construction or interpretation.
|
20.
|
Notices
. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing from time to time to the other part.
|
21.
|
Successors and Assigns
. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assign.
|
22.
|
Severability
. Whenever feasible, each provision of the Notice, this Agreement, and the Omnibus Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision in the Notice, Omnibus Plan or this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Notice, the Omnibus Plan or this Agreement.
|
23.
|
Code Section 409A
. This Performance Share Award is intended to be exempt from or to comply with Section 409A of the Code and shall be interpreted, operated and administered in a manner consistent with such intent. To the extent this Agreement provides for the Performance Share Award to become vested and be settled upon the Participant’s termination of employment, the applicable Shares shall be transferred to the Participant or his or her beneficiary upon the Participant’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Participant is a “specified employee,” within the meaning of Section 409A of the Code, then to the extent the Performance Share Award constitutes nonqualified deferred compensation, within the meaning of Section 409A of the Code, such Shares shall be transferred to the Participant or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Participant’s death.
|
24.
|
No Advice Regarding Performance Share Award
. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s acquisition or sale of any Shares issued in payment of the Performance Share Award. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors before taking any action related to the Performance Share Award.
|
25.
|
Language
. If the Participant has received this Agreement or any other document related to the Omnibus Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version shall control.
|
26.
|
Appendix I
. Notwithstanding any provisions in this Agreement, the Performance Share Award grant shall be subject to any special terms and conditions set forth in Appendix I to this Agreement for the Participant’s country. Moreover, if the Participant relocates to one of the countries included in Appendix I, the special terms and conditions for such country shall apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with laws in the country where the Participant resides regarding the issuance of Shares, or to facilitate the administration of the Performance Share Award. Appendix I constitutes part of this Agreement.
|
27.
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any documents related to current or future Performance Share Awards by electronic means or to request the Participant’s consent to participate in the Omnibus Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Omnibus Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
28.
|
Imposition of Other Requirements
. The Company reserves the right to impose other requirements on the Participant’s participation in the Omnibus Plan or on the Performance Share Award and on any Shares issued in payment of the Performance Share Award, to the extent the Company determines it is necessary or advisable in order to comply with laws in the country where the Participant resides regarding the issuance of Shares, or to facilitate the administration of the Performance Share Award, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
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1.
|
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
During the course of Executive's Service, Executive will have access to Confidential Information. For purposes of this Agreement, "
Confidential Information
" means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, raw partners and/or competitors of the Company. Executive agrees that Executive shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of Executive's assigned duties and for the benefit of the Company, either during the period of Executive's Service or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company's part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by Executive during Executive's Service. The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to Executive; (ii) becomes generally known to the public subsequent to disclosure to Executive through no wrongful act of Executive or any representative of Executive; or (iii) Executive is required to disclose by applicable law, regulation or legal process (provided that, to the extent permitted by law, Executive provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).
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2.
|
NON-COMPETITION.
Executive acknowledges that (i) Executive performs services of a unique nature for the Company that are irreplaceable, and that Executive's performance of such services to a competing business will result in irreparable harm to the Company, (ii) Executive has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company, (iii) in the course of Executive's employment by or service to a competitor, Executive would inevitably use or disclose such Confidential Information, (iv) the Company has substantial relationships with its customers and Executive has had and will continue to have access to these customers, (v) Executive has received and will receive specialized training from the Company, and (vi) Executive has generated and will continue to generate goodwill for the Company in the course of Executive's Service. Accordingly, during Executive's Service and for eighteen (18) months following a termination of Executive's Service for any reason (the "
Restricted Period
"), Executive will not engage in any business activities, directly or indirectly (whether as an employee, consultant, officer, director, partner, joint venturer, manager, member, principal, agent, or independent contractor, individually, in concert with others, or in any other manner) within the same line or lines of business for which the Executive performed services for the Company and in a capacity that is similar to the capacity in which the Executive was employed by the Company with any person or entity that competes with the Company in the consumer packaged food and beverage industry ("
Competitive Business
") anywhere within the same geographic territory(ies) for which the Executive performed services for the Company (the "
Restricted Territory
"). Notwithstanding the foregoing, nothing herein shall prohibit Executive from being a passive owner of not more than three percent (3%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company, so long as Executive has no active participation in the business of such corporation.
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3.
|
NON-SOLICITATION.
During the Restricted Period, Executive agrees that Executive shall not, except in the furtherance of Executive's duties to the Company, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid, induce, assist in the solicitation of, or accept any business (other than on behalf of the Company) from, any customer or potential customer of the Company to purchase goods or services then sold by the Company from another person, firm, corporation or other entity or, directly or indirectly, in any way request, suggest or advise any such customer to withdraw or cancel any of their business or refuse to continue to do business with the Company. This restriction shall apply to customers or potential customers who, during the two (2) years immediately preceding the Executive's termination, had been assigned to the Executive by the Company, or with which the Executive had contact on behalf of the Company while an Executive of the Company, or about which the Executive had access to confidential information by virtue of Executive's employment with the Company.
|
4.
|
NON-INTERFERENCE
. During the Restricted Period, Executive agrees that Executive shall not, except in the furtherance of Executive's duties to the Company, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, (A) solicit, aid or induce any employee, representative or agent of the Company to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company and its vendors, suppliers or customers. As used herein, the term "solicit, aid or induce" includes, but is not limited to, (i) initiating communications with a Company employee relating to possible employment, (ii) offering bonuses or other compensation to encourage a Company employee to terminate his or her employment with the Company and accept employment with any entity, (iii) recommending a Company employee to any entity, and (iv) aiding an entity in recruitment of a Company employee. An employee, representative or agent shall be deemed covered by this
Section 4
while so employed or retained and for a period of six (6) months thereafter.
|
5.
|
NON-DISPARAGEMENT.
Executive agrees not to make negative comments or otherwise disparage the Company or its officers, directors, employees, shareholders, agents or products or services. The foregoing shall not be violated by truthful statements made in (a) response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) or (b) the good faith performance of Executive's duties to the Company.
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6.
|
INVENTIONS.
|
a.
|
Executive acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, methods, works of authorship and other work product ("
Inventions
"), whether patentable or unpatentable, (A) that are reduced to practice, created, invented, designed, developed, contributed to, or improved with the use of any Company resources and/or within the scope of Executive's work with the Company or that relate to the business, operations or actual or demonstrably anticipated research or development of the Company, and that are made or conceived by Executive, solely or jointly with others, during Executive's Service, or (B) suggested by any work that Executive performs in connection with the Company, either while performing Executive's duties with the Company or on Executive's own time, but only insofar as the Inventions are related to Executive's work as an employee or other service provider to the Company, shall belong exclusively to the Company (or its designee), whether or not patent or other applications for intellectual property protection are filed thereon. Executive will keep full and complete written records (the "
Records
"), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and Executive will surrender them upon the termination of Service, or upon the Company's request. Executive irrevocably conveys, transfers and assigns to the Company the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to Executive's Service, together with the right to file, in Executive's name or in the name of the Company (or its designee), applications for patents and equivalent rights (the "
Applications
").
|
b.
|
In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company and Executive agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to Executive. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Company, Executive hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of Executive's right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, Executive hereby waives any so-called "moral rights" with respect to the Inventions.
To the extent that Executive has any rights in the results and proceeds of Executive's service to the Company that cannot be assigned in the manner described herein, Executive agrees to unconditionally waive the enforcement of such rights. Executive hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to Executive's benefit by virtue of Executive being an employee of or other service provider to the Company.
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7.
|
RETURN OF COMPANY PROPERTY.
On the date of Executive's termination of Service with the Company for any reason (or at any time prior thereto at the Company's request), Executive shall return all property belonging to the Company (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company).
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8.
|
REASONABLENESS OF COVENANTS.
In signing this Agreement, including by electronic means, Executive gives the Company assurance that Executive has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed by it. Executive agrees that these restraints are necessary for the reasonable and proper protection of the Company and its Confidential Information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent Executive from obtaining other suitable employment during the period in which Executive is bound by the restraints. Executive acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and that Executive has sufficient assets and skills to provide a livelihood while such covenants remain in force. Executive further covenants that Executive will not challenge the reasonableness or enforceability of any of the covenants set forth in this Agreement, and that Executive will reimburse the Company for all costs (including reasonable attorneys' fees) incurred in connection with any action to enforce any of the provisions of this Agreement if either the Company prevails on any material issue involved in such dispute or if Executive challenges the reasonableness or enforceability of any of the provisions of this Agreement.
It is also agreed that the "Company" as used in this Agreement refers to each of the Company's Subsidiaries and Affiliates and that each of the Company's s Subsidiaries and Affiliates will have the right to enforce all of Executive's obligations to that Subsidiary or Affiliate under this Agreement, as applicable, subject to any limitation or restriction on such rights of the Subsidiary or Affiliate under applicable law.
|
9.
|
REFORMATION.
If it is determined by a court of competent jurisdiction in any state or country that any restriction in this Agreement is excessive in duration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state or country.
|
10.
|
REMEDIES
. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Agreement would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond or other security, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages, in addition to any other equitable relief (including without limitation an accounting and/or disgorgement) and/or any other damages as a matter of law.
|
11.
|
REPURCHASE
. Executive acknowledges and agrees that a breach of this Agreement would constitute a "Covenant Breach" as such term is used in the Omnibus Plan and therefore, in the event of a Covenant Breach, Executive's PSUs and the Shares issued in payment thereof (as such terms are defined in the Omnibus Plan) shall be subject to repurchase by The Kraft Heinz Company in accordance with the terms of the Omnibus Plan.
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12.
|
TOLLING.
In the event of any violation of the provisions of this Agreement, Executive acknowledges and agrees that the post-termination restrictions contained in this Agreement shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.
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13.
|
SURVIVAL OF PROVISIONS.
The obligations contained in this Agreement
hereof shall survive the termination or expiration of the Executive's Service with the Company and shall be fully enforceable thereafter.
|
14.
|
VENUE, PERSONAL JURISDICTION, AND COVENANT NOT TO SUE
. Executive expressly agrees to submit to the exclusive jurisdiction and exclusive venue of courts located in the State of Delaware in connection with any litigation which may be brought with respect to a dispute between the Company and Executive in relation to this Restrictive Covenants Agreement, regardless of where Executive resides or where Executive performs services for the Company. Executive hereby irrevocably waives Executive's rights, if any, to have any disputes between the Company and Executive related to this Restrictive Covenants Agreement decided in any jurisdiction or venue other than a court in the State of Delaware. Executive hereby waives, to the fullest extent permitted by applicable law, any objection which Executive now or hereafter may have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding, and Executive agrees not to plead or claim the same. Executive further irrevocably covenants not to sue the Company related to this Restrictive Covenants Agreement in any jurisdiction or venue other than a court in the State of Delaware. All matters relating to the interpretation, construction, application, validity, and enforcement of this Agreement, and any disputes or controversies arising hereunder, will be governed by the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule, whether of the State of Delaware or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Delaware.
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Subsidiary
|
|
State or Country
|
Alimentos Heinz de Costa Rica S.A.
|
|
Costa Rica
|
Alimentos Heinz, C.A.
|
|
Venezuela
|
Asian Restaurants Limited
|
|
United Kingdom
|
Battery Properties, Inc.
|
|
Delaware
|
Boca Foods Company
|
|
Delaware
|
Cairo Food Industries, S.A.E.
|
|
Egypt
|
Capri Sun, Inc.
|
|
Delaware
|
Carlton Bridge Limited
|
|
United Kingdom
|
Churny Company, Inc.
|
|
Delaware
|
Claussen Pickle Co.
|
|
Delaware
|
Comercializadora Heinz de Panama SCA
|
|
Panama
|
Country Ford Development Limited
|
|
China
|
Delimex de Mexico S.A. de C.V.
|
|
Mexico
|
Delta Incorporated Limited
|
|
British Virgin Islands
|
Devour Foods LLC
|
|
Delaware
|
Distribuidora Heinz Caracas, C.A.
|
|
Venezuela
|
Distribuidora Heinz Maracaibo, C.A.
|
|
Venezuela
|
Fall Ridge Partners LLP
|
|
United Kingdom
|
Foodstar (China) Investments Company Limited
|
|
China
|
Foodstar (Shanghai) Foods Co. Ltd.
|
|
China
|
Foodstar Holdings Pte Ltd.
|
|
Singapore
|
Fundacion Heinz
|
|
Venezuela
|
Garland BBQ Company
|
|
Delaware
|
Gevalia Kaffe LLC
|
|
Delaware
|
Golden Circle Limited
|
|
Australia
|
Guangzhou United Logistics Company Limited
|
|
China
|
H. J. Heinz Belgium S.A.
|
|
Belgium
|
H. J. Heinz Company Brands LLC
|
|
Delaware
|
H. J. Heinz Global Holding B.V.
|
|
Netherlands
|
H. J. Heinz Nigeria Limited
|
|
Nigeria
|
H.J HEINZ GLOBAL HOLDING LLC
|
|
Delaware
|
H.J. Heinz Asset Leasing Limited
|
|
United Kingdom
|
H.J. Heinz B.V.
|
|
Netherlands
|
H.J. Heinz Company (New Zealand) Limited
|
|
New Zealand
|
H.J. Heinz Company Australia Limited
|
|
Australia
|
H.J. Heinz Company Limited
|
|
United Kingdom
|
H.J. Heinz cr/sr a.s., v likvidaci
|
|
Czech Republic
|
H.J. Heinz European Holding B.V.
|
|
Netherlands
|
H.J. Heinz Finance UK PLC
|
|
United Kingdom
|
H.J. Heinz Foods Spain S.L.U.
|
|
Spain
|
H.J. Heinz Foods UK Limited
|
|
United Kingdom
|
H.J. Heinz France SAS
|
|
France
|
H.J. Heinz Frozen & Chilled Foods Limited
|
|
United Kingdom
|
H.J. Heinz Global Holding C.V.
|
|
Netherlands
|
H.J. Heinz GmbH
|
|
Germany
|
H.J. Heinz Group B.V.
|
|
Netherlands
|
H.J. Heinz Holding B.V.
|
|
Netherlands
|
H.J. Heinz Investments Coöperatief U.A.
|
|
Netherlands
|
H.J. Heinz Ireland Holdings
|
|
Ireland
|
H.J. Heinz Manufacturing Belgium BVBA
|
|
Belgium
|
H.J. Heinz Manufacturing Ireland Limited
|
|
Ireland
|
H.J. Heinz Manufacturing Spain S.L.U.
|
|
Spain
|
H.J. Heinz Manufacturing UK Limited
|
|
United Kingdom
|
H.J. Heinz Nederland B.V.
|
|
Netherlands
|
H.J. Heinz Netherlands Holdings C.V.
|
|
Netherlands
|
H.J. Heinz Polska Sp. z o.o.
|
|
Poland
|
H.J. Heinz Supply Chain Europe B.V.
|
|
Netherlands
|
H.J. Heinz US Brands LLC
|
|
Delaware
|
Heinz (China) Investment Company Limited
|
|
China
|
Heinz (China) Sauces & Condiments Co. Ltd.
|
|
China
|
Heinz Africa and Middle East FZE
|
|
United Arab Emirates
|
Heinz Africa FZE
|
|
United Arab Emirates
|
Heinz ASEAN Pte. Ltd.
|
|
Singapore
|
Heinz Brasil Alimentos Ltda.
|
|
Brazil
|
Heinz Brasil, S.A.
|
|
Brazil
|
Heinz Colombia SAS
|
|
Colombia
|
Heinz Credit LLC
|
|
Delaware
|
Heinz Egypt LLC
|
|
Egypt
|
Heinz Egypt Trading LLC
|
|
Egypt
|
Heinz Europe Unlimited
|
|
United Kingdom
|
Heinz Finance (Luxembourg) S.à r.l
|
|
Luxembourg
|
Heinz Foods South Africa (Proprietary) Limited
|
|
South Africa
|
Heinz Foreign Investment Company
|
|
Idaho
|
Heinz Frozen & Chilled Foods B.V.
|
|
Netherlands
|
Heinz Gida Anonim Sirketi
|
|
Turkey
|
Heinz Hong Kong Limited
|
|
China
|
Heinz India Private Ltd.
|
|
India
|
Heinz Investments (Cyprus) Limited
|
|
Cyprus
|
Heinz Israel Limited
|
|
Israel
|
Heinz Italia S.p.A.
|
|
Italy
|
Heinz Japan Ltd.
|
|
Japan
|
Heinz Korea Ltd.
|
|
South Korea
|
Heinz Mexico, S.A. de C.V.
|
|
Mexico
|
Heinz Nutrition Foundation India
|
|
India
|
Heinz Pakistan (Pvt.) Limited
|
|
Pakistan
|
Heinz Panama, S.A.
|
|
Panama
|
Heinz Produzioni Alimentari SRL
|
|
Italy
|
Heinz Purchasing Company
|
|
Delaware
|
Heinz Qingdao Food Co., Ltd.
|
|
China
|
Heinz Receivables LLC
|
|
Delaware
|
Heinz Sales & Marketing (MALAYSIA) SDN. BHD.
|
|
Malaysia
|
Heinz Shanghai Enterprise Services Co, Ltd.
|
|
China
|
Heinz Single Service Limited
|
|
United Kingdom
|
Heinz South Africa (Pty.) Ltd.
|
|
South Africa
|
Heinz Thailand Limited
|
|
Delaware
|
Heinz Transatlantic Holding LLC
|
|
Delaware
|
Heinz UFE Ltd.
|
|
China
|
Heinz Vietnam Company Limited
|
|
Vietnam
|
Heinz Wattie's Limited
|
|
New Zealand
|
Heinz Wattie's Pty Ltd
|
|
Australia
|
Heinz-Noble, Inc.
|
|
Arizona
|
Helco Services Limited
|
|
United Kingdom
|
Highview Atlantic Finance (Barbados) SRL
|
|
Barbados
|
HJH Development Corporation
|
|
Delaware
|
HJH Overseas L.L.C.
|
|
Delaware
|
Horizon FZCO
|
|
United Arab Emirates
|
Horizon UAE FZCO
|
|
United Arab Emirates
|
HP Foods Holdings Limited
|
|
United Kingdom
|
HP Foods International Limited
|
|
United Kingdom
|
HP Foods Limited
|
|
United Kingdom
|
Hugo Canning Company Pty Limited
|
|
Papua New Guinea
|
HZ.I.L. Ltd.
|
|
Israel
|
Industria Procesadora de Alimentos de Barcelona C.A.
|
|
Venezuela
|
International Gourmet Specialties LLC
|
|
Delaware
|
International Spirits Recipes, LLC
|
|
Delaware
|
Istituto Scotti Bassani per la Ricerca e l'Informazione Scientifica e Nutrizionale
|
|
Italy
|
Jacobs Road Limited
|
|
Cayman Islands
|
Kaiping Guanghe Fermented Bean Curd Co. Ltd.
|
|
China
|
Kaiping Jiashili Dried Fruit and Nuts Co. Ltd.
|
|
China
|
Kaiping Weishida Seasonings Co. Ltd.
|
|
China
|
KFG Management Services LLC
|
|
Delaware
|
KHFC Luxembourg Holdings S.à r.l
|
|
Luxembourg
|
Koninklijke De Ruijter B.V.
|
|
Netherlands
|
Kraft Foods Group Brands LLC
|
|
Delaware
|
Kraft Foods Group Exports LLC
|
|
Delaware
|
Kraft Foods Group Netherlands Holding B.V.
|
|
Netherlands
|
Kraft Foods Group Puerto Rico LLC
|
|
Puerto Rico
|
Kraft Heinz (Barbados) SRL
|
|
Barbados
|
Kraft Heinz (Ireland) Ltd
|
|
Ireland
|
Kraft Heinz Argentina S.R.L.
|
|
Argentina
|
Kraft Heinz Australia Pty Limited
|
|
Australia
|
Kraft Heinz Brasil Participações LTDA
|
|
Brazil
|
Kraft Heinz Canada ULC
|
|
Canada
|
KRAFT HEINZ CHILE LIMITADA
|
|
Chile
|
Kraft Heinz Foods Company
|
|
Pennsylvania
|
Kraft Heinz Foods Company L.P.
|
|
Canada
|
Kraft Heinz Foods Luxembourg Holdings S.à r.l
|
|
Luxembourg
|
Kraft Heinz Global Finance B.V.
|
|
Netherlands
|
Kraft Heinz Holding LLC
|
|
Delaware
|
Kraft Heinz Holding C.V.
|
|
Netherlands
|
Kraft Heinz Ingredients Corp.
|
|
Delaware
|
Kraft Heinz Intermediate Corporation I
|
|
Delaware
|
Kraft Heinz Intermediate Corporation II
|
|
Delaware
|
Kraft Heinz International B.V.
|
|
Netherlands
|
Kraft Heinz Receivables LLC
|
|
Delaware
|
Kraft Heinz Sewickley C.V.
|
|
Netherlands
|
Kraft Heinz UK Limited
|
|
United Kingdom
|
Kraft Heinz Yangjiang Foods Co., Ltd.
|
|
China
|
Kraft New Services LLC
|
|
Delaware
|
La Bonne Cuisine Limited
|
|
New Zealand
|
Langtech Citrus Pty. Limited
|
|
Australia
|
Lea & Perrins Limited
|
|
United Kingdom
|
Lea & Perrins LLC
|
|
Delaware
|
LLC Heinz-Georgievsk
|
|
Russia
|
LLC Ivanovsky Kombinat Detskogo Pitaniya
|
|
Russia
|
Master Chef Limited
|
|
New Zealand
|
Mealtime Stories, LLC
|
|
Delaware
|
MILKSUN, spol. s.r.o.
|
|
Slovakia
|
Nanjing Jilun Seasoning Products Pte. Ltd.
|
|
China
|
Nature's Delicious Foods Group LLC
|
|
Delaware
|
Noble Insurance Company Limited
|
|
Ireland
|
O.R.A. LLC
|
|
California
|
P.T. Heinz ABC Indonesia
|
|
Indonesia
|
Petroproduct-Otradnoye Ltd.
|
|
Russia
|
Phenix Management Corporation
|
|
Delaware
|
Pollio Italian Cheese Company
|
|
Delaware
|
PPK Ltd.
|
|
Russia
|
Pro-Share Limited
|
|
United Kingdom
|
Pudliszki Sp. z o.o.
|
|
Poland
|
Renee's Gourmet Foods Inc.
|
|
Canada
|
RINC Ltd.
|
|
Israel
|
Seven Seas Foods, Inc.
|
|
Delaware
|
Sewickley LLC
|
|
Delaware
|
The Kraft Heinz Company Foundation
|
|
Illinois
|
The Yuban Coffee Company
|
|
Delaware
|
Thompson & Hills Limited
|
|
New Zealand
|
TNCOR Ltd.
|
|
Israel
|
Top Taste Company Limited
|
|
New Zealand
|
Tsai Weng Ping Incorporated Limited
|
|
British Virgin Islands
|
Weishida (Nanjing) Foods Co. Ltd.
|
|
China
|
Wexford LLC
|
|
Delaware
|
WW Foods, LLC
|
|
Delaware
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Bernardo Hees
|
Chief Executive Officer
|
January 31, 2018
|
Bernardo Hees
|
(Principal Executive Officer)
|
|
|
|
|
/s/ David H. Knopf
|
Executive Vice President and Chief Financial Officer
|
January 31, 2018
|
David H. Knopf
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Christopher R. Skinger
|
Vice President, Global Controller
|
January 31, 2018
|
Christopher R. Skinger
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ Alexandre Behring
|
Chairman of the Board
|
January 31, 2018
|
Alexandre Behring
|
|
|
|
|
|
/s/ John T. Cahill
|
Vice Chairman of the Board
|
January 31, 2018
|
John T. Cahill
|
|
|
|
|
|
/s/ Gregory E. Abel
|
Director
|
January 31, 2018
|
Gregory E. Abel
|
|
|
|
|
|
/s/ Warren E. Buffett
|
Director
|
January 31, 2018
|
Warren E. Buffett
|
|
|
|
|
|
/s/ Tracy Britt Cool
|
Director
|
January 31, 2018
|
Tracy Britt Cool
|
|
|
|
|
|
/s/ Feroz Dewan
|
Director
|
January 31, 2018
|
Feroz Dewan
|
|
|
|
|
|
/s/ Jeanne P. Jackson
|
Director
|
January 31, 2018
|
Jeanne P. Jackson
|
|
|
|
|
|
/s/ Jorge Paulo Lemann
|
Director
|
January 31, 2018
|
Jorge Paulo Lemann
|
|
|
|
|
|
/s/ Mackey J. McDonald
|
Director
|
January 31, 2018
|
Mackey J. McDonald
|
|
|
|
|
|
/s/ John C. Pope
|
Director
|
January 31, 2018
|
John C. Pope
|
|
|
|
|
|
/s/ Marcel Herrmann Telles
|
Director
|
January 31, 2018
|
Marcel Herrmann Telles
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
December 30, 2017
of
The Kraft Heinz Company
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Bernardo Hees
|
|
Bernardo Hees
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
December 30, 2017
of
The Kraft Heinz Company
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ David H. Knopf
|
|
David H. Knopf
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Company’s Annual Report on Form 10-K for the period ended
December 30, 2017
(the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Bernardo Hees
|
Name:
|
Bernardo Hees
|
Title:
|
Chief Executive Officer
|
1.
|
The Company’s Annual Report on Form 10-K for the period ended
December 30, 2017
(the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ David H. Knopf
|
Name:
|
David H. Knopf
|
Title:
|
Executive Vice President and Chief Financial Officer
|