Company: KHC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001637459-25-000061
Chunk: 66

Company: Kraft Heinz Co
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 1
Chunk 66
---
 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, for a discussion of the timing of the annual impairment test.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units and brands requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows (including net sales, cost of products sold, SG&A, 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 has led and could in the future lead to goodwill or intangible asset impairments.

Our reporting units that were impaired in 2024 were written down to their respective fair values, resulting in zero excess fair value over carrying amount as of the applicable impairment test dates. Accordingly, these and our other reporting units that had 20% or less excess fair value over carrying amount as of their latest impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Reporting units with 10% or less fair value over carrying amount, including reporting units that were impaired as part of their latest impairment test resulting in zero excess fair value over carrying amount, had an aggregate goodwill carrying amount after impairment of $21.9 billion as of the latest impairment test and included TMS, AFH, MC, and CNAC. Our WE reporting unit had 10-20% fair value over carrying amount with an aggregate goodwill carrying amount of $2.2 billion as of the latest impairment test. Our HD and Asia reporting units had 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $4.6 billion as of the latest impairment test. Our reporting units that have less than 5% excess fair value over carrying amount as of the latest impairment test are considered at a heightened risk of future impair