Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 26

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 in tax rates that cause us to revalue our deferred tax balances produce volatility in our effective tax rate. Our quarterly income tax provision is determined based on our estimated full year effective tax rate, adjusted for tax attributable to infrequent or unusual items, which are recognized on a discrete period basis in the income tax provision for the period in which they occur.Our estimated annual effective tax rate was 25.8% as of June 28, 2025, and 20.7% as of June 29, 2024. The year-over-year increase was primarily due to the changes made to our corporate entity structure in December 2024 in conjunction with the Pillar Two legislative developments made under the Organization for Economic Co-operation and Development (OECD). See our consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 28, 2024 for additional information on this change to our corporate entity structure.Our effective tax rate for the three months ended June 28, 2025 was a benefit of 4.2% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 21.6%. This impact was partially offset by the favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.Our effective tax rate for the three months ended June 29, 2024 was an expense of 71.1% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 50.8%. This impact was partially offset by the favorable geographic mix of pre-tax income in various non-U.S. jurisdictions and the release of a valuation allowance on certain deferred tax assets.The year-over-year change in the effective tax rate for the three-month period was primarily driven by the impact of non-deductible goodwill impairments and a less favorable geographic mix of pre-tax income in various non-U.S. jurisdictions primarily due to the changes made to our corporate entity structure in December 2024.

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Our effective tax rate for the six months ended June 28, 2025 was a benefit of 0.6% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 24.7%. In addition to the impact of these non-cash impairment losses, our effective tax rate was favorably impacted by the geographic mix of pre-tax income in various non-U.S. jurisdictions.Our effective tax rate for the six