Company: KHC
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001637459-25-000166
Chunk: 40

Company: Kraft Heinz Co
Filing Date: 2025-10-29
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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, excluding interest, and assert penalties of approximately $85 million for each of 2018 and 2019. In the third quarter of 2025, we received a NOPA for the years 2020 through 2022 that could result in additional U.S. federal income tax expense and liability of approximately $200 million for 2020, $210 million for 2021, and $200 million for 2022, excluding interest and penalties for each year. We expect to receive a NOPA in the fourth quarter of 2025 asserting penalties for these periods similar to the amounts asserted for the years 2018 and 2019. We strongly disagree with the IRS’s positions, believe that our tax positions are well documented and properly supported, and intend to vigorously contest the positions taken by the IRS and pursue all available administrative and judicial remedies. Therefore, we have not recorded any reserves related to this issue. We continue to maintain the same operating model and transfer pricing methodology with our foreign subsidiaries that was in place for the years 2018 through 2022. We believe our income tax reserves are appropriate for all open tax years and that final adjudication of this matter will not have a material impact on our results of operations and cash flows. However, the ultimate outcome of this matter is uncertain, and if we are required to pay the IRS additional U.S. taxes, interest, and/or potential penalties, our results of operations and cash flows could be materially affected.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. The OBBBA includes changes to U.S. tax law that will be applicable to the Company beginning in 2025. These changes include provisions allowing accelerated tax deductions for qualified property and research and development expenditures. While OBBBA did not have a significant impact on our total tax provision as of September 27, 2025, we are still evaluating our position on the elective provisions of the law and the potential impacts of those elections on our financial statements.

Note 10.  Employees’ Stock Incentive Plans

Stock Options:Our stock option activity and related information was:Number of Stock OptionsWeighted Average Exercise Price(per share)Outstanding at December 28, 20246,720,421 $46.44 Granted936,208 30.71 Forfeited(1,933,016)51.30 Exercised(39,355)