Company: KHC
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001637459-25-000166
Chunk: 32

Company: Kraft Heinz Co
Filing Date: 2025-10-29
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 units globally, six of which comprise our goodwill balance. These six reporting units had an aggregate goodwill carrying amount of $22.2 billion at September 27, 2025.Accumulated impairment losses to goodwill were $20.2 billion as of September 27, 2025 and $13.5 billion as of December 28, 2024.

11

Q2 2025 Goodwill Impairment TestingDuring the second quarter of 2025, we concluded that the sustained decline in our share price and market capitalization was a triggering event requiring an interim goodwill impairment assessment for all reporting units. We performed an interim impairment test (“Q2 Impairment Test”) as of the last day of our second quarter, June 28, 2025, and utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.As a result of our Q2 Impairment Test, we recognized non-cash goodwill impairment losses of $6.7 billion in SG&A in the second quarter of 2025, of which $3.1 billion related to our TMS reporting unit, $1.6 billion related to our MC reporting unit, $805 million related to our CNAC reporting unit, and $400 million related to our AFH reporting unit within our North America segment, as well as $819 million related to our Western Europe (“WE”) reporting unit within our International Developed Markets segment.The impairments of our TMS, AFH, WE, MC, and CNAC reporting units were primarily due to the market’s perceived risk of our ability to achieve our future cash flow projections, due, in part, to uncertainty in the macroeconomic environment in which we operate. The impairment of our MC reporting unit was also partially driven by a reduction of future long-term growth assumptions.Q1 2025 Goodwill Impairment TestingIn the first quarter of 2025, certain organizational changes occurred that impacted our reporting unit composition within our International Developed Markets segment (the “Q1 Europe reorganization”). Two of our International Developed Market reporting units — Northern Europe (“NE”) and Continental Europe (“CE”) — were combined into one reporting unit, Western Europe (“WE”). None of our other reporting units were impacted by this reorganization.As a result of this reorganization, the existing assets and liabilities of the impacted reporting units were combined and we performed an interim impairment test (or transition test) on the affected reporting units on both a pre- and post-re