Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 185

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 2
Chunk 185
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 depreciation and amortization, working capital, and capital expenditures), income tax considerations, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors. If current expectations of future growth rates and margins are not met, if market factors outside of our control change; such as discount rates, market capitalization, income tax rates, foreign currency exchange rates, or inflation, or if management’s expectations or plans otherwise change, including updates to our long-term operating plans, then one or more of our reporting units or brands might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets could lead to future goodwill or intangible asset impairments.

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As detailed in Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, we recorded impairment losses related to goodwill and indefinite-lived intangible assets in the second quarter of 2025. Our reporting units and brands that were impaired in 2025 were written down to their respective fair values, resulting in zero excess fair value over carrying amount as of the Q2 Impairment Test date. Accordingly, our reporting units and brands that have 20% or less excess fair value over carrying amount as of the Q2 Impairment Test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Our reporting units that were impaired as part of our Q2 Impairment Test, resulting in zero excess fair value over carrying amount, had an aggregate goodwill carrying amount after impairment of $17.6 billion as of the Q2 Impairment Test and included TMS, AFH, WE, MC, and CNAC reporting units. These reporting units are considered at a heightened risk of future impairments. Our HD reporting unit had less than 20% fair value over carrying amount with carrying amount of $4.3 billion and our Asia reporting units had less than 50% fair value over carrying amount with an aggregate goodwill carrying amount of $312 million as of the Q2 Impairment Test. Our four remaining reporting units had no goodwill carrying amount at the time of the Q2 Impairment Test.

Our brands that were impaired as part of the Q2 Impairment Test, resulting in zero excess fair value over carrying amount, had an aggregate carrying amount of $13.0 billion as of the Q2 Impairment Test and included Kraft, Velveeta, A1, Lunchables, Maxwell House, and Claussen. Further, our