Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 96

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 8
Chunk 96
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ategic assets could lead to future goodwill impairments.Indefinite-lived intangible assets:Changes in the carrying amount of indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions):Balance at December 28, 2024$36,456 Impairment losses(2,561)Translation adjustments and other323 Balance at June 28, 2025$34,218 Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $34.2 billion at June 28, 2025.Q2 2025 Indefinite-Lived Intangible Asset Impairment TestingDuring the second quarter of 2025, we concluded that the sustained decline in our share price and market capitalization was a triggering event requiring an interim indefinite-lived intangible asset impairment assessment for our brands. As part of the Q2 Impairment Test, we utilized the multi-period excess earnings and relief from royalty method under the income approach to estimate the fair value of our indefinite-lived intangible assets.As a result of our Q2 Impairment Test, we recognized non-cash intangible asset impairment losses of $2.6 billion in SG&A in the second quarter of 2025, of which $1.9 billion related to Kraft, $382 million related to Velveeta, $175 million related to Lunchables, $100 million related to Maxwell House and $42 million related to two other brands in our North America segment, consistent with ownership of the trademarks. The impairments of these brands were primarily due to the market’s perceived risk of our ability to achieve our future year revenue growth and margin growth assumptions, due, in part, to uncertainty in the macroeconomic environment in which we operate. After these impairments, the aggregate carrying amount of these brands was $13.0 billion.Additional Indefinite-Lived Intangible Asset ConsiderationsAs of the Q2 Impairment Test, brands with 20% or less fair value over carrying amount had an aggregate carrying amount after impairment of $17.6 billion, brands with 20%-50% fair value over carrying amount had an aggregate carrying amount of $7.7 billion, and brands that had over 50% fair value over carrying amount had an aggregate carrying amount of $8.9 billion.Our brands that were impaired as of the applicable impairment test dates were written down to their respective fair values resulting