Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 94

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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AC”) and Other North America reporting units were not impacted by this reorganization.As a result of the Q2 North America reorganization, we reassigned assets and liabilities to the applicable reporting units and allocated goodwill using the relative fair value approach. We performed an interim impairment test (or “2024 transition test”) on the affected reporting units on both a pre- and post-reorganization basis. As part of our Q2 North America pre-reorganization impairment test of the TMA and FBD reporting units, we utilized the discounted cash flow method under the income approach to estimate the fair values as of March 31, 2024 for these two reporting units and concluded that the fair value of these reporting units exceeded their carrying values and no impairment was recorded. We performed our Q2 North America post-reorganization impairment test as of March 31, 2024, and tested the new North America reporting units (TMS, HD, MC and AFH). We 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 North America post-reorganization impairment test, we recognized a non-cash impairment loss of approximately $854 million in SG&A in our North America segment in the second quarter of 2024. The $854 million impairment loss related to our MC reporting unit, which had a goodwill carrying amount of approximately $2.5 billion after impairment. The impairment of our MC reporting unit was driven by the disaggregation of the former FBD reporting unit, which previously held all the net assets for the HD and MC reporting units as well as the Snacking category of TMS.Additional Goodwill ConsiderationsOur reporting units that were impaired as of the Q2 Impairment Test were written down to their respective fair values resulting in zero excess fair value over carrying amount. These reporting units include TMS, AFH, WE, MC, and CNAC, which had an aggregate goodwill carrying amount of $17.6 billion as of the Q2 Impairment Test. Our HD reporting unit had less than 20% fair value over carrying amount with an aggregate goodwill carrying amount of $4.3 billion. Accordingly, these reporting units have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.Our Asia reporting unit had 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $312 million as of the Q2 Impairment Test date. Although our Asia reporting unit had