Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 22

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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-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 more than 20% excess fair value over carrying amount as of our latest impairment test, this amount is also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

10

As of the first day of the third quarter of 2025, certain organizational changes occurred that resulted in a change to the reporting unit composition within our North America segment. Our six North America reporting units — TMS, HD, MC, AFH, CNAC, and Other North America — were reorganized into the five reporting units: Elevation; Hydration, Desserts, & Meals (“HDM”); Meat, Cheese, Coffee, & Snacks (“MCCS”); Canada; and Other North America. We have determined these changes represent a change in composition for the TMS, HD, MC, AFH, and CNAC reporting units as they will be reorganized into Elevation, HDM, MCCS, and Canada reporting units and will require us to reallocate goodwill from the former reporting units to the new reporting units. As a result of this organizational change,