Company: KHC
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001637459-25-000011
Chunk: 112

Company: Kraft Heinz Co
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 112
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 which had an aggregate goodwill carrying amount of $19.0 billion. Our four remaining reporting units had no goodwill carrying amount at the time of the 2024 annual impairment test.

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Our indefinite-lived brands with 10% or less fair value over carrying amount, comprised entirely of brands that were impaired within 2024, resulting in zero excess fair value over carrying amount, had an aggregate carrying amount of $2.6 billion as of the latest test for each brand and included Oscar Mayer, Lunchables, Claussen, and Wattie’s. Brands with 10-20% fair value over carrying amount had an aggregate carrying amount of $14.2 billion as of the latest test for each brand and included Kraft, Velveeta, A1, and Bagel Bites. The aggregate carrying amount of brands with fair value over carrying amount between 20-50% was $2.8 billion as of the latest test for each brand. Although the remaining brands, with a carrying amount of $16.9 billion, have more than 50% excess fair value over carrying amount as of the latest test for each brand, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future. Our brands that have less than 5% excess fair value over carrying amount as of the latest test for each brand are considered at a heightened risk of future impairments and include our Oscar Mayer, Lunchables, Claussen, and Wattie’s brands, which had an aggregate carrying amount of $2.6 billion. 

We generally utilize the discounted cash flow method under the income approach to estimate the fair value of our reporting units. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual net cash flows for each reporting unit (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax rates, long-term growth rates, royalty rates, a discount rate that appropriately reflects the risks inherent in each future cash flow stream, and other market factors. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management’s plans, and guideline companies.

We utilize the excess earnings method under the income approach to estimate the fair value of certain of our largest brands. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual net cash flows for each