Kraft Heinz KHC · USD

Acquisitions and DivestituresDivestituresItaly Infant Transaction:On July 9, 2025, we entered into a definitive agreement with a third party, NewPrinces S.p.A., to sell our infant and specialty food business in Italy, within our International Developed Markets segment (the “Italy Infant Transaction”). The net assets to be transferred in the Italy Infant Transaction include, among other things, our intellectual property rights to the Plasmon and Nipiol brands and one manufacturing facility in Italy (collectively, the “Italy Infant Disposal Group”).In the third quarter of 2025, we determined that the Italy Infant Disposal Group met the held for sale criteria. Accordingly, we have presented the assets and liabilities of the Italy Infant Disposal Group as held for sale on the consolidated balance sheet at December 27, 2025. As of July 9, 2025, the date the Italy Infant Disposal Group was determined to be held for sale, we tested the individual assets included within the Italy Infant Disposal Group for impairment. We determined that the net assets of the Italy Infant Disposal Group had an aggregate carrying amount above their estimated fair value less cost to sell, and that the goodwill within the Italy Infant Disposal Group was fully impaired. Accordingly, we recorded a non-cash goodwill impairment loss of $40 million, which was recognized in SG&A, for the year ended December 27, 2025. Further, we recorded an estimated pre-tax loss on sale of business of $47 million for the year ended December 27, 2025, which was recognized in other expense/(income) on our consolidated statement of income.On December 31, 2025, in the first quarter of our fiscal year 2026, we closed the Italy Infant Transaction for total cash consideration of approximately $146 million.Russia Infant Transaction:On March 11, 2024, we closed and finalized the sale of our infant nutrition business in Russia to a third party for total cash consideration of approximately $25 million (the “Russia Infant Transaction”). As a result of the Russia Infant Transaction, we recognized an insignificant pre-tax gain in other expense/(income) on our condensed consolidated statement of income in the first quarter of 2024.Papua New Guinea Transaction:On February 5, 2024, we closed and finalized the sale of 100% of the equity interests in our Papua New Guinea subsidiary, Hugo Canning Company Limited, to a third party for total cash consideration of approximately $22 million (the “Papua New Guinea Transaction”).

Cybersecurity Risk Management and StrategyWe assess, identify, and manage cybersecurity risk using a data-driven risk management program intended to maintain our Company’s obligations to prevent harm to parties, including employees, customers, and stockholders; as well as reduce cybersecurity risks associated with our Company’s pursuit of business objectives.As part of our cybersecurity strategy, we set risk targets based on our risk thresholds using industry-recognized standards for controlling and evaluating the risk of cybersecurity threats. The Company has developed cybersecurity policies supported by defined standards, including identity and access control, network controls, operational security, information classification, cybersecurity risk management, incident management and reporting, and security in software development lifecycle.We undertake scheduled and targeted cybersecurity risk assessments to identify and prioritize risks so that foreseeably harmed parties (which include our employees, contractors, partners, customers, stockholders, consumers, and suppliers) are explicitly included in our risk analysis and risk management priorities. We plan for, implement, and improve safeguards that are designed to reduce unacceptable risks to any foreseeably harmed party. We engage third-party service providers (including contractors and vendors) as part of our normal business operations, including collaborating with third-party experts to assist with evaluating, identifying, and managing our cybersecurity risks. Our cybersecurity risk management program includes:•Penetration testing of the Kraft Heinz environment, and annual review of program maturity based on National Institute of Standards and Technology (“NIST”);•Due diligence reviews of third-party service providers’ information security programs;•Regular phishing, social engineering, and cybersecurity awareness training for employees with Company emails and access to connected devices;•Annual tabletop exercises to educate and train our personnel on response capabilities and inform adjustments to our controls and response;•Regular consultation with external advisors and specialists regarding opportunities and enhancements to strengthen our cybersecurity practices and policies;•Ongoing cybersecurity event monitoring, management, and testing of incident response procedures; and•Ongoing enhancements to cybersecurity capabilities based on evolving threats.

Accumulated Other Comprehensive Income/(Losses)The components of, and changes in, accumulated other comprehensive income/(losses), net of tax, were as follows (in millions):Foreign Currency Translation AdjustmentsNet Postemployment Benefit Plan AdjustmentsNet Cash Flow Hedge AdjustmentsNet Fair Value HedgesTotalBalance at December 31, 2022$(2,845)$(30)$65 $— $(2,810)Foreign currency translation adjustments307 — — — 307 Net deferred gains/(losses) on net investment hedges(119)— — — (119)Amounts excluded from the effectiveness assessment of net investment hedges28 — — — 28 Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)(27)— — — (27)Net deferred gains/(losses) on cash flow hedges— — 3 — 3 Amounts excluded from the effectiveness assessment of cash flow hedges— — 19 — 19 Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)— — (50)— (50)Net actuarial gains/(losses) arising during the period— (70)— — (70)Net postemployment benefit losses/(gains) reclassified to net income/(loss)— 115 — — 115 Other activity22 — (22)— — Total other comprehensive income/(loss)211 45 (50)— 206 Balance at December 30, 2023(2,634)15 15 — (2,604)Foreign currency translation adjustments(486)— — — (486)Net deferred gains/(losses) on net investment hedges121 — — — 121 Amounts excluded from the effectiveness assessment of net investment hedges38 — — — 38 Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)(38)— — — (38)Net deferred gains/(losses) on cash flow hedges— — 21 — 21 Amounts excluded from the effectiveness assessment of cash flow hedges— — 6 — 6 Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)— — 39 — 39 Amounts excluded from the effectiveness assessment of fair value hedges— — — (23)(23)Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss)— — — (3)(3)Net actuarial gains/(losses) arising during the period— 35 — — 35 Prior service credits/(costs) arising during the period— (7)— — (7)Net postemployment benefit losses/(gains) reclassified to net income/(loss)— (14)— — (14)Total other comprehensive income/(loss)(365)14 66 (26)(311)Balance at December 28, 2024(2,999)29 81 (26)(2,915)Foreign currency translation adjustments998 — — — 998 Net deferred gains/(losses) on net investment hedges(313)— — — (313)Amounts excluded from the effectiveness assessment of net investment hedges28 — — — 28 Net deferred losses/(gains) on net i

Employees’ Stock Incentive PlansWe grant equity awards, including stock options, restricted stock units (“RSUs”), and performance share units (“PSUs”), to select employees to provide long-term performance incentives to our employees.Stock PlansWe had activity related to equity awards from the following plans in 2025, 2024, and 2023:2020 Omnibus Incentive Plan:In May 2020, our stockholders approved The Kraft Heinz Company 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”), which was adopted by our Board of Directors (“Board”) in March 2020. The 2020 Omnibus Plan became effective March 2, 2020 (the “Plan Effective Date”) and will expire on the tenth anniversary of the Plan Effective Date. The 2020 Omnibus Plan authorizes the issuance of up to 36 million shares of our common stock for awards to employees, non-employee directors, and other key personnel. The 2020 Omnibus Plan provides for the grant of options, stock appreciation rights, restricted stock, RSUs, deferred stock, performance awards, other stock-based awards, and cash-based awards. Equity awards granted under the 2020 Omnibus Plan include awards that vest in full at the end of a three-year period as well as awards that vest in annual installments over three or four years beginning on the second anniversary of the original grant date. Non-qualified stock options have a maximum exercise term of 10 years from the date of the grant. As of the Plan Effective Date, awards will no longer be granted under The Kraft Heinz Company 2016 Omnibus Incentive Plan, the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan, Kraft Foods Group, Inc. 2012 Performance Incentive Plan (“2012 Performance Incentive Plan”), or any other equity plans other than the 2020 Omnibus Plan.2016 Omnibus Incentive Plan:In April 2016, our stockholders approved The Kraft Heinz Company 2016 Omnibus Incentive Plan (“2016 Omnibus Plan”), which was adopted by our Board in February 2016. The 2016 Omnibus Plan authorized grants of up to 18 million shares of our common stock pursuant to options, stock appreciation rights, RSUs, deferred stock, performance awards, investment rights, other stock-based awards, and cash-based awards. Equity awards granted under the 2016 Omnibus Plan prior to 2019 generally vest in full at the end of a five-year period.

Goodwill and Intangible AssetsGoodwill:Changes in the carrying amount of goodwill, by segment, were (in millions):North AmericaInternational Developed MarketsEmerging MarketsTotalBalance at December 30, 2023$27,248 $2,687 $524 $30,459 Impairment losses(959)(495)(184)(1,638)Translation adjustments and other(57)(58)(33)(148)Balance at December 28, 2024$26,232 $2,134 $307 $28,673 Impairment losses(5,875)(859)— (6,734)Translation adjustments and other35 195 10 240 Balance at December 27, 2025$20,392 $1,470 $317 $22,179 In 2025, we recorded non-cash goodwill impairment losses of $5.9 billion within our North America segment, $859 million within our International Developed Markets segment, and no impairment losses were recorded within Emerging Markets. These impairments were primarily related to an interim impairment test performed in the second quarter of 2025 resulting from the triggering event discussed below, and $40 million of impairment losses within our International Developed Markets segment related to goodwill attributable to the Italy Infant Disposal Group, which was determined to be fully impaired. The remaining impacts to goodwill in 2025 were related to translation adjustments. See Note 5. Acquisitions and Divestitures, for additional information related to the Italy Infant Transaction and its financial statement impact.In 2024, we recorded non-cash goodwill impairment losses of $959 million within our North America segment, $495 million within our International Developed Markets segment, and $184 million within Emerging Markets as a result of our 2024 goodwill impairment testing discussed below. The remaining impact to goodwill in 2024 primarily related to translation adjustments. 2025 Goodwill Impairment TestingQ1 2025 Goodwill Impairment TestingIn the first quarter of 2025, certain organizational changes occurred that impacted our reporting unit composition within our International Developed Markets segment (the “Q1 Europe reorganization”). Two of our International Developed Market reporting units — Northern Europe (“NE”) and Continental Europe (“CE”) — were combined into one reporting unit, Western Europe (“WE”). None of our other reporting units were impacted by this reorganization.As a result of this reorganization, the existing assets and liabilities of the impacted reporting units were combined and we performed an interim impairment test (or transition test) on the affected reporting units on both a pre- and post-reorganization basis.

Use of EstimatesWe prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which requires us to make accounting policy elections, estimates, and assumptions that affect the reported amount of assets, liabilities, reserves, and expenses. These accounting policy elections, estimates, and assumptions are based on our best estimates and judgments. We evaluate our policy elections, estimates, and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates to be reasonable given the current facts available. We adjust our policy elections, estimates, and assumptions when facts and circumstances dictate. Market volatility, including foreign currency exchange rates, increases the uncertainty inherent in our estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our consolidated financial statements.

Previously Announced Separation TransactionOn September 2, 2025, we announced a plan to separate the Company into two independent, publicly traded companies through a tax-free spin-off (the “Separation”). On February 11, 2026, we announced that the Kraft Heinz Board of Directors (the “Board”) has decided to pause work related to the Separation. If completed, the Separation would result in two companies, whose names would be determined at a later date, one of which would focus on Taste Elevation and shelf-stable meals, and the other of which would focus on certain North American staples. If work related to the Separation is resumed, the Separation would be subject to the satisfaction of customary conditions, including final approval by the Board, receipt of favorable tax opinions of our U.S. tax advisors with respect to the tax-free nature of the Separation, and the effectiveness of appropriate filings with the U.S. Securities and Exchange Commission. The timing of the Separation and whether it will be completed is uncertain and we cannot assure that the Separation will be completed on the anticipated timeline or at all or that the terms of the Separation will not change. We incurred $60 million of separation costs for the year ended December 27, 2025, primarily related to consulting, advisory and employee-related costs. These costs were recognized in SG&A on our consolidated statements of income.

Significant Accounting PoliciesRevenue Recognition:Our revenues are primarily derived from customer orders for the purchase of our products. We recognize revenues as performance obligations are fulfilled when control passes to our customers. We record revenues net of variable consideration, including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). We also record a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. We base these estimates principally on historical and current period experience factors. We recognize costs paid to third-party brokers to obtain contracts as expenses as our contracts are generally less than one year.Advertising, Consumer Incentives, and Trade Promotions:We promote our products with advertising, consumer incentives, and performance obligations related to trade promotions. Consumer incentives and trade promotions include, but are not limited to, discounts, coupons, rebates, performance-based in-store display activities, and volume-based incentives. Variable consideration related to consumer incentive and trade promotion activities is recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization, redemption rates, and/or current period experience factors. We review and adjust these estimates at least quarterly based on actual experience and other information. Advertising expenses are recorded in selling, general and administrative expenses (“SG&A”). For interim reporting purposes, we charge advertising to operations as a percentage of estimated full year sales activity and marketing costs. We then review and adjust these estimates each quarter based on actual experience and other information. Our definition of advertising expenses includes advertising production costs, in-store advertising costs, agency fees, brand promotions and events, and sponsorships, in addition to costs to obtain advertising in television, radio, print, digital, and social channels. We recorded advertising expenses of $1,073 million in 2025, $1,031 million in 2024, and $1,071 million in 2023.