What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-15 · 523 added, 435 removed, 1763 unchanged (35% of the section changed)

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment Assessments for Certain Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $30.5 billion as of December 30, 2023.

Interim and Annual Goodwill Impairment Assessments for Certain Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $28.7 billion as of December 28, 2024, a significant portion of which related to certain reporting units, Taste Elevation, Ready Meals, and Snacking (TMS), Away from Home & Kraft Heinz Ingredients (AFH), Meat & Cheese (MC), Canada and North America Coffee (CNAC), and Continental Europe (CE).

Management tests reporting units for impairment annually as of the first day of the third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

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If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount, not to exceed the associated carrying amount of goodwill.

Management recognized non-cash goodwill impairment losses of $510 million for the year ended December 30, 2023.

Management recognized non-cash goodwill impairment losses of $1.6 billion for the year ended December 28, 2024, a significant portion of which related to the AFH, MC, and CE reporting units.

Management utilizes the discounted cash flow method under the income approach to estimate the fair value of reporting units.

As disclosed by management, management’s cash flow projections included significant assumptions related to net sales, cost of products sold, selling, general, and administrative costs (SG&A), depreciation and amortization, working capital, capital expenditures, income tax rates, discount rates, long-term growth rates, and other market factors.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for certain reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value of the reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to net sales, cost of products sold, SG&A, discount rates, and long-term growth rates;

Management’s cash flow projections included significant assumptions related to net sales, cost of products sold, selling, general, and administrative costs (SG&A), depreciation and amortization, working capital, capital expenditures, income tax rates, discount rates, long-term growth rates, royalty rates, and other market factors.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments (for TMS, AFH, and MC) and annual goodwill impairment assessments (for TMS, AFH, MC, CNAC, and CE) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Company’s reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value of the reporting units;

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the TMS, AFH, MC, CNAC, and CE reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units;

(ii) evaluating the appropriateness of the discounted cash flow method used by management;

(iii) testing the completeness and accuracy of underlying data used in the method;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to net sales, cost of products sold, SG&A, discount rates and long-term growth rates.

Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, discount rates and long-term growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to net sales, cost of products sold, SG&A, discount rate, long-term growth rate, and royalty rate, as applicable to the reporting unit.

Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, royalty rates, discount rates, and long-term growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow method and (ii) the reasonableness of the discount rate and long-term growth rate assumptions.

Impairment Assessments for Certain Indefinite-Lived Intangible Assets

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s indefinite-lived intangible assets balance, which consists primarily of individual brands, was $38.5 billion as of December 30, 2023, a majority of which relates to indefinite-lived intangible assets valued using the excess earnings method.

Annual Impairment Assessments for Certain Indefinite-Lived Intangible Assets– Individual Brands

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s indefinite-lived intangible assets balance, which consists primarily of individual brands, was $36.5 billion as of December 28, 2024, a portion of which related to certain brands, Kraft , Velveeta , Oscar Mayer , and Lunchables .

Management tests brands for impairment annually as of the first day of the third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a brand is less than its carrying amount.

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If the carrying amount of a brand exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount.

Management recognized non-cash indefinite-lived intangible asset impairment losses of $152 million for the year ended December 30, 2023, a portion of which relates to indefinite-lived intangible assets valued using the excess earnings method.

As a result of its annual impairment test, management recognized non-cash indefinite-lived intangible asset impairment losses of $0.6 billion for the year ended December 28, 2024.

As disclosed by management, management utilizes either an excess earnings method or relief from royalty method to estimate the fair value of its brands.

Using the excess earnings method, management’s cash flow projections included significant assumptions relating to net sales, cost of products sold, SG&A, contributory asset charges, income tax considerations, long-term growth rates, discount rates, and other market factors.

Using the excess earnings method, management’s cash flow projections included significant

assumptions relating to net sales, cost of products sold, SG&A, contributory asset charges, income tax considerations, long-term growth rates, discount rates, and other market factors.

Using the relief from royalty method, management’s cash flow projections included significant assumptions related to net sales, royalty rates, income tax considerations, long-term growth rates, discount rates, and other market factors.

The principal considerations for our determination that performing procedures relating to the impairment assessments for certain indefinite-lived intangible assets is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the brands;

The principal considerations for our determination that performing procedures relating to the annual indefinite-lived intangible impairment assessments (for Kraft , Velveeta , Oscar Mayer , and Lunchables ) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the brands;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) net sales, cost of products sold, SG&A, and long-term growth rates, as applicable to the brand, for the excess earnings method and (b) net sales and royalty rates, as applicable to the brand, for the relief from royalty method;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible assets impairment assessment, including controls over the valuation of the Company’s indefinite-lived intangible assets.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the brands;

(ii) evaluating the appropriateness of the excess earnings method used by management;

(ii) evaluating the appropriateness of the excess earnings and relief from royalty methods used by management;

(iii) testing the completeness and accuracy of underlying data used in the methods;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to net sales, cost of products sold, SG&A, long-term growth rates and discount rates for the excess earnings method.

Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, long-term growth rates and discount rates for the excess earnings method involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the individual brands;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to (a) net sales, cost of products sold, SG&A, and long-term growth rates, as applicable to the brand, used for the excess earnings method and (b) net sales and royalty rates, as applicable to the brand, used for the relief from royalty method.

Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, and long-term growth rates for the excess earnings method and net sales and royalty rates for the relief from royalty method involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s excess earnings method and (ii) the reasonableness of the long-term growth rate and discount rate assumptions for the excess earnings method.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s excess earnings and relief from royalty methods and (ii) the reasonableness of the long-term growth rate assumption for the excess earnings method and the reasonableness of the royalty rates assumption for the relief from royalty method.

Valuation of Non-US Deferred Tax Asset Related to the Change in Entity Structure

As described in Note 9 to the consolidated financial statements, the Company enacted changes to its corporate entity structure, which included a transfer of and will result in the movement of certain business operations to a wholly-owned subsidiary in the Netherlands, resulting in a tax benefit of $3 billion recorded as a non-U.S.

deferred tax asset in December 2024.

The deferred tax asset was recognized as a result of the book and tax basis difference on the business transferred, with the tax basis determined by reference to the fair value of the business.

As disclosed by management, management used the discounted cash flow method to estimate the fair value of the business and made significant assumptions related to net sales, discount rate, long-term growth rate, income tax rates, and other market factors.

The recognition of the future tax benefits associated with the transaction are dependent upon the acceptance of the business valuation and tax step-up by the associated taxing authorities.

The principal considerations for our determination that performing procedures relating to the valuation of the non-US deferred tax asset related to the change in entity structure is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the business and related value of the deferred tax asset;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the recognition of future tax benefits and management’s significant assumptions related to net sales, discount rate, long-term growth rate, and income tax rates;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s assessment of the valuation of the non-US deferred tax asset related to the change in entity structure, including controls over the valuation of the business transferred.

These procedures also included, among others (i) evaluating the positive and negative evidence available to assess management’s assessment of the realizability of the deferred tax asset related to the change in entity structure;

(ii) testing management’s process for developing the fair value estimate of the business, (iii) evaluating the appropriateness of the discounted cash flow method;

(iv) testing the completeness and accuracy of underlying data used in the method;

and (v) evaluating the reasonableness of the significant assumptions used by management related to net sales, discount rate, long term growth rate, and income tax rates.

Evaluating management’s significant assumptions related to net sales, discount rate, and long-term growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the transferred business;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s

discounted cash flow method;

(ii) the reasonableness of the discount rate, income tax rates, and long-term growth rate assumptions;

and (iii) the recognition of future tax benefits associated with this transaction.

/s/ PricewaterhouseCoopers LLP

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Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 39 ( 50 ) 26

Amounts excluded from the effectiveness assessment of fair value hedges ( 23 ) — —

Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) ( 3 ) — —

Net actuarial gains/(losses) arising during the period 35 ( 70 ) ( 386 )

Prior service credits/(costs) arising during the period ( 7 ) — —

Net postemployment benefit losses/(gains) reclassified to net income/(loss) ( 14 ) 115 ( 8 )

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Other current assets 583 569

Assets held for sale 3 4

Total current assets 7,655 7,929

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LIABILITIES AND EQUITY

Commercial paper and other short-term debt $ — $ 6

Current portion of long-term debt 654 638

Trade payables 4,627 4,848

Accounts payable

Accrued marketing 697 733

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Additional paid-in capital 52,135 52,037

Retained earnings/(deficit) 1,367 489

Retained earnings

Accumulated other comprehensive income/(losses) ( 2,915 ) ( 2,604 )

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Balance at December 25, 2021

$ 12 $ 53,379 $ ( 1,682 ) $ ( 1,824 ) $ ( 587 ) $ 150 $ 49,448

Net income/(loss) excluding redeemable noncontrolling interest — — 2,363 — — 9 2,372

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Balance at December 31, 2022

12 51,834 489 ( 2,810 ) ( 847 ) 152 48,830

Net income/(loss) excluding redeemable noncontrolling interest — — 2,855 — — 1 2,856

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— — ( 1,977 ) — — — ( 1,977 )

Dividends declared-noncontrolling interest ($ 100.30 per share)

— — — — — ( 7 ) ( 7 )

Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other — 203 — — ( 439 ) 9 ( 227 )

Balance at December 30, 2023

12 52,037 1,367 ( 2,604 ) ( 1,286 ) 162 49,688

Net income/(loss) excluding redeemable noncontrolling interest — — 2,744 — — 2 2,746

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— — ( 1,940 ) — — — ( 1,940 )

Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other — 203 — — ( 439 ) 9 ( 227 )

Dividends declared-noncontrolling interest ($ 98.77 per share on January 31, 2024 and $ 95.03 per share on December 11, 2024)

— — — — — ( 14 ) ( 14 )

Repurchase of common stock

— — — — ( 939 ) — ( 939 )

Exercise of stock options, issuance of other stock awards, and other

— 98 — — 7 4 109

Balance at December 28, 2024

$ 12 $ 52,135 $ 2,171 $ ( 2,915 ) $ ( 2,218 ) $ 134 $ 49,319

See accompanying notes to the consolidated financial statements.

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Depreciation and amortization 948 961 933

Amortization of postemployment benefit plans prior service costs/(credits) ( 14 ) ( 14 ) ( 7 )

Divestiture-related license income ( 54 ) ( 54 ) ( 56 )

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Deferred income tax provision/(benefit) ( 2,857 ) 17 ( 278 )

Postemployment benefit plan contributions ( 22 ) ( 23 ) ( 27 )

Postemployment benefit plan asset transfers/(contributions)

161 ( 22 ) ( 23 )

Goodwill and intangible asset impairment losses 3,669 662 913

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Loss/(gain) on sale of business 81 ( 4 ) ( 25 )

Proceeds from sale of license — — 1,587

Loss/(gain) on extinguishment of debt — — ( 38 )

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Payments to acquire business, net of cash acquired — — ( 481 )

Payments to acquire intangible assets

Settlement of net investment hedges 75 31 208

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Reportable Segments

We manage and report our operating results through two reportable segments defined by geographic region:

North America and International.

During the fourth quarter of 2023, certain organizational changes were announced that are expected to impact our future internal reporting and reportable segments.

We expect to divide our International segment into three operating segments — Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — in order to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

As a result of these changes, we expect to have two reportable segments:

In the first quarter of 2024, we divided our International segment into three operating segments — Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

Subsequently, we manage our operating results through four operating segments.

We have two reportable segments defined by geographic region:

North America and International Developed Markets.

We anticipate that our remaining operating segments, consisting of WEEM and AEM, will be combined and disclosed as Emerging Markets.

We expect that the change to our reportable segments will be effective in the first quarter of 2024.

Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

Use of Estimates

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Reclassifications

We made reclassifications and adjustments to certain previously reported financial information to conform to our current period presentation, including certain updates to our fair value of pension and postretirement benefit plan assets tables to expand and clarify our asset categories.

We have reflected these changes in all historical periods presented and these updates have no net impact on the total plan assets at fair value or leveling disclosed.

See Note 11, Postemployment Benefits , for additional information.

We made reclassifications and adjustments to certain previously reported financial information to conform to our current period presentation.

Held for Sale

At December 30, 2023 and December 31, 2022, we classified certain assets as held for sale in our consolidated balance sheet, primarily relating to land use rights across the globe.

At December 28, 2024, assets classified as held for sale were insignificant.

At December 30, 2023, we classified certain assets as held for sale recorded in other current assets in our consolidated balance sheet, primarily relating to land use rights across the globe.

Cash , Cash Equivalents , and Restricted Cash

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Cash and cash equivalents that are legally restricted as to withdrawal or usage are classified in other current assets or other non-current assets, as applicable, on the consolidated balance sheets.

Restricted cash recorded in other current assets was $ 3 million at December 30, 2023 and restricted cash recorded in other non-current assets was $ 1 million at December 30, 2023 and $ 1 million at December 31, 2022.

At December 28, 2024, we had restricted cash of $ 31 million recorded in other current assets and restricted cash of $ 121 million recorded in other non-current assets.

At December 30, 2023, we had restricted cash of $ 3 million recorded in other current assets and restricted cash of $ 1 million recorded in other non-current assets.

The year-over-year increase was due to the conversion of certain assets related to the U.S.

postretirement medical plan to cash.

See Note 11, Postemployment Benefits , for additional information.

Total cash, cash equivalents, and restricted cash was $ 1,486 million at December 28, 2024 and $ 1,404 million at December 30, 2023.

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See Note 10, Employees’ Stock Incentive Plans , for additional information.

Divestiture-Related License Income

In 2020, we entered into a definitive agreement with a third party, an affiliate of Groupe Lactalis (“Lactalis”) to sell certain assets in our global cheese business, as well as to license the Kraft , Velveeta and Philadelphia trademarks, for a total consideration of approximately $ 3.3 billion.

Of the $ 3.3 billion total consideration, approximately $ 1.6 billion was attributed to the licensing of the Kraft , Velveeta and Philadelphia trademarks based on the estimated fair value of the licensed portion of each brand.

The license income related to the perpetual licenses of the Kraft and Velveeta brands are recognized over a period of approximately 30 years.

The license income related to the transitional license of the Philadelphia brand was recognized over a period of approximately three years .

We recognized license income of approximately $ 54 million in 2024 and 2023, and $ 56 million in 2022, which is recorded as a reduction to SG&A.

Related to this agreement, we have recorded approximately $ 1.4 billion in long-term deferred income and $ 54 million in other current liabilities at December 28, 2024, and $ 1.4 billion in long-term deferred income and $ 55 million in other current liabilities at December 30, 2023 on the consolidated balance sheet.

Postemployment Benefit Plans:

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We also recognize deferred tax assets for temporary differences, operating loss carryforwards, and tax credit carryforwards.

Deferred tax assets are included in other non-current assets on the consolidated balance sheet.

Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes.

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Accordingly, we recognize the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement.

Future changes in judgment related to the expected ultimate resolution of uncertain tax positions will affect our results in the quarter of such change.

Future changes in judgment related to the expected ultimate resolution of uncertain tax positions will affect our results in the period of such change.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized.

When assessing the need for valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies.

When assessing the need for valuation allowances, we consider future taxable income, future legislative developments, and ongoing prudent and feasible tax planning strategies.

Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for/(benefit from) income taxes.

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Goodwill and Intangible Assets :

We maintain 11 reporting units, seven of which comprise our goodwill balance.

We maintain 12 reporting units, eight of which comprise our goodwill balance.

Our indefinite-lived intangible asset balance primarily consists of a number of individual brands.

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We have lease agreements with non-lease components that relate to the lease components (e.g., common area maintenance such as cleaning or landscaping, insurance, etc.).

We account for each lease and any non-lease components associated with that lease as a single lease component for all underlying asset classes.

We generally account for each lease and any non-lease components associated with that lease as a single lease component for all underlying asset classes.

Accordingly, all costs associated with a lease contract are accounted for as lease costs.

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Derivatives are recorded on our consolidated balance sheets as assets or liabilities at fair value, which fluctuates based on changing market conditions.

Certain derivatives are designated as cash flow hedges and qualify for hedge accounting treatment, while others are not designated as hedging instruments and are marked to market through net income/(loss).

Certain derivatives are designated as cash flow hedges or fair value hedges and qualify for hedge accounting treatment, while others are not designated as hedging instruments and are marked to market through net income/(loss).

The gains and losses on cash flow hedges are deferred as a component of accumulated other comprehensive income/(losses) and are recognized in net income/(loss) at the time the hedged item affects net income/(loss), in the same line item as the underlying hedged item.

The excluded component on cash flow hedges is recognized in net income/(loss) over the life of the hedging relationship in the same income statement line item as the underlying hedged item.

The gains/(losses) on fair value hedges are recognized in net income/(loss) at the time the hedged item affects net income/(loss), in the same line item as the underlying hedged item.

The excluded component on cash flow hedges and fair value hedges is recognized in net income/(loss) over the life of the hedging relationship in the same income statement line item as the underlying hedged item.

We also designate certain derivatives and non-derivatives as net investment hedges to hedge the net assets of certain foreign subsidiaries which are exposed to volatility in foreign currency exchange rates.

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We have primarily used interest rate swaps and treasury locks to hedge the variability of interest payment cash flows on a portion of our future debt obligations.

• Foreign currency fair value hedges.

We use derivative instruments to hedge changes in the fair value of foreign currency denominated assets or liabilities due to changes in exchange rates.

These instruments may include cross-currency swap contracts and foreign exchange forward contracts.

The gains/(losses) on the hedged item, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our derivative instrument, which is reported in the same income statement line item in the same period.

The amounts excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis in the same line item as the hedged item.

• Commodity derivatives.

We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials.

We enter into commodity purchase contracts primarily for dairy products, vegetable oils, corn, coffee beans, wheat products, meat products, sugar cane, and cocoa beans.

We enter into commodity purchase contracts primarily for dairy products, vegetable oils, coffee beans, corn, wheat products, sugar cane and meat products.

These commodity purchase contracts generally are not subject to the accounting requirements for derivative instruments and hedging activities under the normal purchases and normal sales exception.

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Certain non-monetary assets and liabilities are recorded at the applicable historical exchange rates.

We applied highly inflationary accounting to the results of our subsidiaries in Turkey, Venezuela, and Argentina which resulted in nonmonetary currency devaluation losses in other expense/(income) of $ 28 million as of December 30, 2023, $ 17 million as of December 31, 2022, and an insignificant amount as of December 25, 2021.

The net monetary assets of each of our subsidiaries in Turkey, Venezuela, and Argentina were insignificant at December 30, 2023.

Our results of operations in Turkey, Venezuela, and Argentina reflect those of controlled subsidiaries.

In 2024, we applied highly inflationary accounting to the results of our subsidiaries in Turkey, Venezuela, Argentina, Egypt, and Nigeria which resulted in nonmonetary currency devaluation losses in other expense/(income) of $ 16 million as of December 28, 2024.

In 2023 and 2022, we applied highly inflationary accounting to the results of our subsidiaries in Turkey, Venezuela, and Argentina which resulted in nonmonetary currency devaluation losses in other expense/(income) of $ 28 million as of December 30, 2023, and $ 17 million as of December 31, 2022.

The net monetary assets of each of our subsidiaries in Turkey, Venezuela, Argentina, Egypt, and Nigeria were insignificant at December 28, 2024.

Our results of operations in Turkey, Venezuela, Argentina, Egypt, and Nigeria reflect those of controlled subsidiaries.

New Accounting Standards

Accounting Standards Adopted in the Current Year

Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations:

In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-04 to add disclosure requirements relative to supplier financing programs under Accounting Standards Codification (“ASC”) 405, Liabilities .

The guidance requires entities that maintain supplier financing programs to provide information in their financial statements about their use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows.

Specifically, the amendment requires entities to disclose the key terms of their programs, amounts outstanding, balance sheet presentation, and a rollforward of amounts outstanding during the annual period.

Only the amount outstanding at the end of the period is required to be disclosed in interim periods.

We adopted this ASU when it became effective in the first quarter of 2023, except for the rollforward requirement, which is effective in 2024.

The adoption of this ASU did not have a significant impact on our financial statements and related disclosures.

Accounting Standards Not Yet Adopted

Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures:

In November 2023, the FASB issued ASU 2023-07 to improve segment disclosure requirements under ASC 280, Segment Reporting, through enhancing disclosures about significant segment expenses.

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07 to improve segment disclosure requirements under Accounting Standards Codification (“ASC”) 280, Segment Reporting, through enhancing disclosures about significant segment expenses.

The guidance requires entities to provide significant segment expenses that are regularly provided to the chief operating decision maker and other segment expenses included in each reported measure of segment profitability.

The ASU also enhances interim segment reporting requirements by aligning interim disclosures with information that must be disclosed annually in accordance with ASC 280.

The ASU will be effective beginning in 2024 for annual disclosures, and in 2025 for interim disclosures.

Early adoption is permitted.

The new guidance must be applied retrospectively to all prior periods presented in the financial statements, with the significant segment expense and other segment item amounts disclosed based on categories identified in the period of adoption.

We are still evaluating the impacts this ASU will have on our financial statements and related disclosures.

This ASU also enhances interim segment reporting requirements by aligning interim disclosures with information that must be disclosed annually in accordance with ASC 280.

We adopted this ASU in the fourth quarter of 2024 and added certain disclosures in Note 20, Segment Reporting .

The disclosures were applied retrospectively and impacted all prior periods presented.

There was no other impact to our financial statement disclosures as a result of adopting this ASU.

Accounting Standards Not Yet Adopted

Income Taxes (Topic 740) – Improvements to Income Tax Disclosures:

In December 2023, the FASB issued ASU 2023-09 to improve income tax disclosure requirements under ASC 740, Income Taxes .

The guidance requires entities to provide disaggregated information about a reporting entity’s effective tax rate reconciliation and about income taxes paid.

The ASU will be effective for annual periods beginning after December 15, 2024 and will impact our 2025 annual filing.

The guidance requires entities to provide separate information about a reporting entity’s effective tax rate reconciliation and about income taxes paid.

This ASU will be effective for annual periods beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

While the standard will require additional disclosures related to the Company’s income taxes, we do not expect this ASU to have an impact on our financial statements.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

In November 2024, the FASB issued ASU 2024-03 to improve financial reporting under ASC 220, Income Statement-Reporting Comprehensive Income .

The guidance requires entities to disclose additional information about specific expense categories related to cost of sales and SG&A in the notes to financial statements at interim and annual reporting periods.

This ASU will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

We are still evaluating the impacts this ASU will have on our financial statements and related disclosures.

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The Hemmer Acquisition preliminarily resulted in $ 219 million of non-tax deductible goodwill relating principally to Hemmer’s long-term experience and large presence operating in emerging markets.

This goodwill was assigned to the Latin America (“LATAM”) reporting unit within our International segment.

This goodwill was assigned to the Latin America (“LATAM”) reporting unit within Emerging Markets.

In 2022, certain insignificant measurement period adjustments were made to the initial allocation, and the final amount of goodwill was adjusted to $ 215 million.

In the fourth quarter of 2022, a portion of the goodwill became tax deductible following the merger of Hemmer into our existing legal entity structure.

As part of our 2024 annual impairment test, we fully impaired the goodwill related to our LATAM reporting unit, and there is no goodwill carrying value remaining as of December 28, 2024.

See Note 8, Goodwill and Intangible Assets , for additional information.

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Subsequent to the Just Spices Acquisition, the redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for the net income/(loss) attributable to the noncontrolling interest.

In the third quarter of 2023, we completed the redemption of an additional 5 % of the outstanding shares and own 90 % of the controlling interest in Just Spices as of December 30, 2023.

In the third quarter of 2023, we completed the redemption of an additional 5 % of the outstanding shares.

In the second quarter of 2024, we completed the redemption of the remaining outstanding shares and wholly own Just Spices as of December 28, 2024.

We utilized fair values at the Just Spices Acquisition Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed.

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The Just Spices Acquisition preliminarily resulted in $ 167 million of non-tax deductible goodwill relating principally to Just Spices’ social media presence.

This goodwill was assigned to the Continental Europe reporting unit within our International segment.

This goodwill was assigned to the Continental Europe reporting unit within our International Developed Markets segment.

In 2022, certain insignificant measurement period adjustments were made to the initial allocation, and the final amount of goodwill was adjusted to $ 156 million.

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We used carrying values as of the Just Spices Acquisition Date to value certain current and non-current assets and liabilities, as we determined that they represented the fair value of those items at such date.

Assan Foods Acquisition:

On October 1, 2021 (the “Assan Foods Acquisition Date”), we acquired all of the outstanding equity interests in Assan Gıda Sanayi ve Ticaret A.Ş.

(“Assan Foods”), a condiments and sauces manufacturer based in Turkey, from third parties Kibar Holding Anonim Şirketi and a holder of registered shares of Assan Foods (the “Assan Foods Acquisition”).

The Assan Foods Acquisition was accounted for under the acquisition method of accounting for business combinations.

Total consideration related to the Assan Foods Acquisition was approximately $ 79 million, including cash consideration of $ 70 million and contingent consideration of approximately $ 9 million.

We utilized fair values at the Assan Foods Acquisition Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed.

The purchase price allocation for the Assan Foods Acquisition was final as of the third quarter of 2022.

The final purchase price allocation to assets acquired and liabilities assumed in the Assan Foods Acquisition was (in millions):

Final Allocation

Trade receivables 24

Inventories 26

Other current assets 2

Property, plant and equipment, net 12

Identifiable intangible assets 16

Other non-current assets 5

Short-term debt ( 21 )

Current portion of long-term debt ( 5 )

Trade payables ( 25 )

Other current liabilities ( 2 )

Long-term debt ( 4 )

Other non-current liabilities ( 4 )

Net assets acquired 28

Goodwill on acquisition 51

Total consideration $ 79

The Assan Foods Acquisition preliminarily resulted in $ 64 million of non-tax deductible goodwill relating principally to additional capacity that the Assan Foods manufacturing facilities will provide for our brands in the EMEA East region.

This goodwill was assigned to the EMEA East reporting unit within our International segment.

In 2022, certain insignificant measurement period adjustments were made to the initial allocation, and the final amount of goodwill was adjusted to $ 51 million.

See Note 8, Goodwill and Intangible Assets , for additional information.

Related to our acquisitions, we incurred insignificant deal costs in 2024, 2023 and 2022.

We recognized these deal costs in SG&A.

Potential Dispositions:

In 2023, we entered into agreements to sell two separate businesses within our International segment.

For the twelve months ended December 30, 2023, the two businesses collectively generated approximately 1 % of net sales and an insignificant amount of Segment Adjusted EBITDA for our International segment, and an insignificant amount of consolidated net sales and operating income/(loss).

As of December 30, 2023, the expected timing for when each of these transactions would close remained uncertain, and therefore the related assets and liabilities were classified as held and used on the consolidated balance sheet at December 30, 2023.

We anticipate the collective pre-tax loss on sale of businesses to be approximately $ 100 million, of which approximately $ 60 million relates to the release of accumulated foreign currency translation losses.

On February 5, 2024, we closed on one of the two transactions and finalized the sale of 100 % of the equity interests in our Papua New Guinea subsidiary, Hugo Canning Company Ltd.

The estimated pre-tax loss on sale for this business is approximately $ 80 million, of which approximately $ 40 million relates to the release of accumulated foreign currency translation losses.

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, which is to be paid incrementally over two years following the transaction closing date (the “Papua New Guinea Transaction”).

As a result of the Papua New Guinea Transaction, we recognized a pre-tax loss on sale of business of approximately $ 80 million in other expense/(income) on our condensed consolidated statement of income in the first quarter of 2024, of which approximately $ 41 million relates to the release of accumulated foreign currency losses.

Powdered Cheese Transaction:

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As a result of the Powered Cheese Transaction closing, we recognized a pre-tax gain on sale of business of approximately $ 26 million in other expense/(income) on our consolidated statement of income.

Cheese Transaction:

In September 2020, we entered into a definitive agreement with a third party, an affiliate of Groupe Lactalis (“Lactalis”), to sell certain assets in our global cheese business, as well as to license certain trademarks, for total consideration of approximately $ 3.3 billion, including approximately $ 3.2 billion of cash consideration and approximately $ 141 million related to a perpetual license for the Cracker Barrel brand that Lactalis granted to us for certain products (the “Cheese Transaction”).

The Cheese Transaction had two primary components.

The first component related to the perpetual licenses for the Kraft and Velveeta brands that we granted to Lactalis for certain cheese products (the “ Kraft and Velveeta Licenses”), along with a three-year transitional license that we granted to Lactalis for the Philadelphia brand (the “ Philadelphia License” and collectively, the “Cheese Divestiture Licenses”).

The second component related to the net assets transferred to Lactalis (the “Cheese Disposal Group”).

Of the $ 3.3 billion total consideration, approximately $ 1.6 billion was attributed to the Cheese Divestiture Licenses based on the estimated fair value of the licensed portion of each brand.

As of the Cheese Transaction Closing Date, the license income related to the Kraft and Velveeta Licenses will be recognized over approximately 30 years and the license income related to the Philadelphia License will be recognized over approximately three years .

Related to the Cheese Divestiture Licenses, we recognized license income of approximately $ 54 million in 2023, $ 56 million in 2022, and an insignificant amount of license income in 2021, which was recorded as a reduction to SG&A and classified as divestiture-related license income.

Additionally, at December 30, 2023, we have recorded approximately $ 1.4 billion in long-term deferred income and $ 55 million in other current liabilities on the consolidated balance sheet related to the Cheese Divestiture Licenses.

The Cheese Transaction closed on November 29, 2021 (the “Cheese Transaction Closing Date”).

In 2021, the total gain/loss on sale of business related to the Cheese Transaction was insignificant.

In the fourth quarter of 2021, at the time the licensed rights were granted, we reassessed the remaining fair value of the retained portions of the Kraft and Velveeta brands and recorded a non-cash intangible asset impairment loss related to the Kraft brand of approximately $ 1.24 billion, which was recognized in SG&A .

Nuts Transaction:

In February 2021, we entered into a definitive agreement with a third party, Hormel Foods Corporation, to sell certain assets in our global nuts business for total consideration of approximately $ 3.4 billion (the “Nuts Transaction”).

The net assets transferred in the Nuts Transaction included, among other things, our intellectual property rights to the Planters brand and to the Corn Nuts brand, three manufacturing facilities in the United States, and the associated inventories (collectively, the “Nuts Disposal Group”).

In 2021, we determined that the goodwill within the Nuts Disposal Group was partially impaired.

As a result, we recorded a non-cash goodwill impairment loss of $ 230 million, which was recognized in SG&A.

The Nuts Transaction closed in the second quarter of 2021.

In 2021, the total pre-tax loss on sale of business for the Nuts Transaction was $ 34 million primarily related to estimated costs to sell, which was recognized in other expense/(income) on our consolidated statement of income.

Related to our divestitures, we incurred insignificant deal costs in 2024, 2023, and 2022.

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We have restructuring programs globally, which are focused primarily on streamlining our organizational design.

We eliminated approximately 690 positions in 2023 and 575 positions in 2022 related to these programs.

As of December 30, 2023, we expect to eliminate approximately 200 additional positions in 2024.

In 2023, restructuring activities resulted in expenses of $ 225 million and included $ 21 million of severance and employee benefit costs, $ 41 million of asset-related costs, $ 156 million of other restructuring costs, and $ 7 million of other exit costs.

Other restructuring costs included non-cash charges related to the settlement of one of our U.K.

defined benefit pension plans in 2023.

See Note 11, Postemployment Benefits , for additional information.

We eliminated approximately 270 positions in 2024.

As of December 28, 2024, we expect to eliminate approximately 740 additional positions in 2025 across all zones.

In 2024, restructuring activities resulted in net expenses of $ 20 million and included a net expense of $ 21 million of severance and employee benefit costs, a net benefit of $ 2 million of other exit costs, and a net expense of $ 1 million of asset-related cost.

Restructuring activities resulted in expenses of $ 225 million in 2023 and $ 74 million in 2022.

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Balance at December 30, 2023

$ 23 $ 14 $ 37

Charges/(credits) 21 ( 2 ) 19

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Balance at December 28, 2024

$ 29 $ 11 $ 40

We expect the majority of the liability for severance and employee benefit costs as of December 28, 2024 to be paid by the second quarter of 2025.

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$ 20 $ 225 $ 74

We do not include our restructuring activities within Segment Adjusted EBITDA (as defined in Note 20, Segment Reporting ).

We do not include our restructuring activities within Segment Adjusted Operating Income (as defined in Note 20, Segment Reporting ).

The pre-tax impact of allocating such expenses/(income) to our segments would have been (in millions):

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North America $ 4 $ 15 $ 40

International 220 25 22

International Developed Markets

Emerging Markets (a)

General corporate expenses 9 ( 6 ) 10

$ 20 $ 225 $ 74

(a) Emerging Markets represents the aggregation of our WEEM and AEM operating segments.

Inventories consisted of the following (in millions):

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Property, plant and equipment, net $ 7,152 $ 7,122

At December 30, 2023 and December 31, 2022, property, plant and equipment, net, excluded amounts classified as held for sale.

At December 30, 2023, property, plant and equipment, net, excluded amounts classified as held for sale.

Depreciation expense was $ 696 million in 2024, $ 710 million in 2023, and $ 672 million in 2022.

Goodwill and Intangible Assets

As described in Note 1, Basis of Presentation , in the first quarter of 2024, we divided our International segment into three operating segments — EPDM, WEEM, and AEM.

While this reorganization resulted in a change to our operating segments, it did not impact the existing composition of our reporting units that formerly comprised the goodwill balance of our International segment — Northern Europe, Continental Europe, Latin America (“LATAM”), and Asia — and, therefore, was not indicative of an impairment triggering event.

We have reflected the impact of this segment change in all historical periods presented.

On March 31, 2024, which was the first day of our second quarter of 2024, certain organizational changes occurred that impacted our reporting unit composition within our North America segment (the “Q2 North America reorganization”).

Two of our North America reporting units — Taste, Meals, and Away From Home (“TMA”), and Fresh, Beverages, and Desserts (“FBD”) — were reorganized into the four reporting units:

Taste Elevation, Ready Meals and Snacking (“TMS”), Hydration & Desserts (“HD”), Meat & Cheese (“MC”), and Away from Home & Kraft Heinz Ingredients (“AFH”).

The Canada and North America Coffee (“CNAC”) and Other North America reporting units were not impacted by this reorganization.

Changes in the carrying amount of goodwill, by segment, were (in millions):

North America International Total

North America International Developed Markets Emerging Markets Total

Balance at December 31, 2022 $ 27,685 $ 2,634 $ 514 $ 30,833

Impairment losses ( 452 ) ( 58 ) — ( 510 )

Acquisitions — 386 386

Measurement period adjustments — ( 18 ) ( 18 )

Divestitures ( 37 ) — ( 37 )

Translation adjustments and other 15 111 10 136

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Balance at December 28, 2024

In 2023, we recorded non-cash goodwill impairment losses of $ 452 million within our North America segment and $ 58 million within our International segment as a result of our 2023 goodwill impairment testing discussed below.

$ 26,232 $ 2,134 $ 307 $ 28,673

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.

In 2022, we recorded non-cash goodwill impairment losses of $ 455 million within our North America segment as a result of our 2022 goodwill impairment testing discussed below.

We recorded $ 386 million of additional goodwill in association with the Just Spices Acquisition and the Hemmer Acquisition within our International segment.

In addition, we recorded measurement period adjustments related to the Just Spices Acquisition, the Hemmer Acquisition, and the Assan Acquisition that cumulatively reduced goodwill by $ 18 million in our International segment.

Further, we recorded a $ 37 million reduction of goodwill within our North America segment related to the Powdered Cheese Transaction.

In 2023, we recorded non-cash goodwill impairment losses of $ 452 million within our North America segment and $ 58 million within our International Developed Markets segment as a result of our 2023 goodwill impairment testing discussed below.

The remaining impact to goodwill in 2023 primarily related to translation adjustments.

See Note 4, Acquisitions and Divestitures , for additional information related to these transactions and the related financial statement impacts.

2024 Goodwill Impairment Testing

As a result of the Q2 North America reorganization, we reassigned assets and liabilities to the applicable reporting units and allocated goodwill using the relative fair value approach.

We performed an interim impairment test (or “2024 transition test”) on the affected reporting units on both a pre- and post-reorganization basis.

As part of our Q2 North America pre-reorganization impairment test of the TMA and FBD reporting units, we utilized the discounted cash flow method under the income approach to estimate the fair values as of March 31, 2024, for these two reporting units and concluded that the fair value of these reporting units exceeded their carrying values and no impairment was recorded.

We performed our Q2 North America post-reorganization impairment test as of March 31, 2024, and tested the new North America reporting units (TMS, HD, MC and AFH).

We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.

As a result of our Q2 North America post-reorganization impairment test, we recognized a non-cash impairment loss of approximately $ 854 million in SG&A in our North America segment in the second quarter of 2024.

The $ 854 million impairment loss related to our MC reporting unit, which had a goodwill carrying amount of approximately $ 2.5 billion after impairment.

The impairment of our MC reporting unit was driven by the disaggregation of the former FBD reporting unit, which previously held all the net assets for the HD and MC reporting units as well as the Snacking category of TMS.

The other three reporting units for which no impairment charge was required were TMS, which had a goodwill carrying amount of approximately $ 15.9 billion;

HD, which had a goodwill carrying amount of approximately $ 4.3 billion;

and AFH, which had a goodwill carrying amount of approximately $ 2.8 billion.

We performed our 2024 annual impairment test as of June 30, 2024, which was the first day of our third quarter of 2024.

We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.

As a result of our 2024 annual impairment test, we recognized non-cash goodwill impairment losses in SG&A of approximately $ 495 million related to our Continental Europe reporting unit within our International Developed Markets segment, $ 184 million related to our LATAM reporting unit within Emerging Markets, and $ 105 million related to our AFH reporting unit within our North America segment.

The impairment of our Continental Europe reporting unit was primarily driven by a reduction of future year profitability assumptions from prior estimates in non-core categories and the Just Spices business, as well as higher intercompany royalty expenses resulting from a change in our product mix.

The impairment of our LATAM reporting unit was primarily driven by a reduction of future year profitability assumptions from prior estimates and negative macroeconomic factors, including weakening of the foreign currency exchange rate of the Brazilian real relative to the U.S.

After these impairments, the goodwill carrying amount was approximately $ 2.7 billion in our AFH reporting unit, approximately $ 485 million in our Continental Europe reporting unit, and there is no goodwill carrying value remaining in our LATAM reporting unit.

As of our 2024 annual impairment test, our reporting units with 20 % or less fair value over carrying amount had an aggregate goodwill carrying amount of $ 24.1 billion and included TMS, AFH, MC, Northern Europe, CNAC, and Continental Europe.

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 our 2024 annual impairment test date.

As of December 28, 2024, we maintain 12 reporting units, eight of which comprise our goodwill balance.

These eight reporting units had an aggregate goodwill carrying amount of $ 28.7 billion at December 28, 2024.

Accumulated impairment losses to goodwill were $ 13.5 billion as of December 28, 2024 and $ 11.8 billion at December 30, 2023.

2023 Goodwill Impairment Testing

We performed our 2023 annual impairment test as of July 2, 2023, which was the first day of our third quarter of 2023.

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We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.

As a result of our 2023 annual impairment test, we recognized a non-cash goodwill impairment loss of approximately $ 510 million in SG&A, which included a $ 452 million impairment loss in our Canada and North America Coffee (“CNAC”) reporting unit within our North America segment and a $ 58 million impairment loss in our Continental Europe reporting unit within our International segment.

These impairments were primarily driven by an increase in the discount rate, which was impacted by higher interest rates, a decline in market capitalization, and other market inputs.

After these impairments, the goodwill carrying amount of our CNAC reporting unit is approximately $ 909 million and the goodwill carrying amount of our Continental Europe reporting unit is approximately $ 958 million.

As of our 2023 annual impairment test, our reporting units with 20 % or less fair value over carrying amount had an aggregate goodwill carrying amount of $ 30.1 billion and included Taste, Meals, and Away From Home (“TMA”), Fresh, Beverages, and Desserts (“FBD”), Northern Europe, Continental Europe, CNAC, and LATAM.

Our Asia reporting unit had between 20 - 50 % fair value over carrying amount with an aggregate goodwill carrying amount of $ 309 million as of our 2023 annual impairment test date.

As of December 30, 2023, we maintain 11 reporting units, seven of which comprise our goodwill balance.

These seven reporting units had an aggregate goodwill carrying amount of $ 30.5 billion at December 30, 2023.

Accumulated impairment losses to goodwill were $ 11.8 billion as of December 30, 2023 and $ 11.3 billion at December 31, 2022.

2022 Goodwill Impairment Testing

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The remaining reporting units tested as part of our pre-reorganization impairment test each had excess fair value over carrying amount as of March 27, 2022.

We performed our post-reorganization impairment test in conjunction with our Q2 2022 Annual Impairment Test and tested the new North America reporting units (TMA, FBD, CNAC, and Other North America) along with the reporting units in our International segment.

The new North America reporting units’ goodwill carrying amounts for the post-reorganization and Q2 2022 Annual Impairment Test reflected the pre-reorganization test results, including impairments recorded.

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The impairment of our CNAC reporting unit was primarily driven by reduced revenue growth assumptions and negative macroeconomic factors, including increased interest rates and foreign currency exchange rates for the Canadian dollar relative to the U.S.

2021 Goodwill Impairment Testing

In the first quarter of 2021, we announced the Nuts Transaction and determined that the Nuts Disposal Group was held for sale.

Accordingly, based on a relative fair value allocation, we reclassified $ 1.7 billion of goodwill to assets held for sale, which included a portion of goodwill from four of our reporting units.

The 2021 amounts included in divestitures in the table above represent the $ 230 million of goodwill that was impaired in connection with the Nuts Transaction that closed in 2021.

The Nuts Transaction primarily affected our KSB reporting unit but also affected, to a lesser extent, our ESA, Canada Foodservice, and Puerto Rico reporting units.

These reporting units were evaluated for impairment prior to their representative inclusion in the Nuts Disposal Group as well as on a post-reclassification basis.

The fair value of all reporting units was determined to be in excess of their carrying amounts in both scenarios and, therefore, no impairment was recorded.

We performed our 2021 annual impairment test as of March 28, 2021, which was the first day of our second quarter in 2021.

We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.

As a result of our 2021 annual impairment test, we recognized a non-cash impairment loss of approximately $ 35 million in SG&A in the second quarter of 2021 related to our Puerto Rico reporting unit within our North America segment.

With the update of our five-year operating plan in the second quarter of 2021, we established a revised downward outlook for net sales for this reporting unit.

In the fourth quarter of 2021, we completed the Assan Foods Acquisition and the acquisition of BR Spices Indústria e Comércio de Alimentos Ltda.

(“BR Spices”), both in our International segment.

We assigned the goodwill related to the Assan Foods Acquisition to our EMEA East reporting unit and the goodwill related to the acquisition of BR Spices to our LATAM reporting unit.

Prior to these acquisitions, the EMEA East and LATAM reporting units had no goodwill carrying amounts due to previous impairments.

The acquisitions changed the composition of each of the reporting units, triggering an interim impairment test.

We determined that the carrying amount of each reporting unit exceeded its fair value as of December 25, 2021.

As a result, we recognized a non-cash impairment loss of $ 53 million in SG&A in our International segment, which represented all of the goodwill of the EMEA East and LATAM reporting units.

Additional Goodwill Considerations

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Estimating the fair value of individual reporting units 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 rates, discount rates, growth rates, and other market factors.

Our current expectations also include certain assumptions that could be negatively impacted if we are unable to meet our pricing expectations in relation to inflation.

If current expectations of future growth rates and margins are not met, if market factors outside of our control, such as discount rates, market capitalization, income tax rates, foreign currency exchange rates, or inflation, change, 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 might become impaired in the future.

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Our reporting units that were impaired in 2024, 2023, and 2022 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, our reporting units that have 20 % or less excess fair value over carrying amount as of our 2023 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Although the remaining reporting unit has more than 20 % excess fair value over carrying amount as of our 2023 annual impairment test, this amount is also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

During the fourth quarter of 2023, certain organizational changes were announced that are expected to impact our future internal reporting and reportable segments.

We expect to divide our International segment into three operating segments — Europe and Pacific Developed Markets (International Developed Markets), West and East Emerging Markets (WEEM), and Asia Emerging Markets (AEM) — in order to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

As a result of these changes, we expect to have two reportable segments:

North America and International Developed Markets.

We anticipate that our remaining operating segments, consisting of WEEM and AEM, will be combined and disclosed as Emerging Markets.

We expect that the change to our reportable segments will be effective in the first quarter of 2024.

We will continue to evaluate for possible goodwill impairment triggering events that this reorganization may cause as a result of the potential changes to our existing reporting unit composition.

Accordingly, our reporting units that had 20 % or less excess fair value over carrying amount as of our 2024 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Although the remaining reporting units had more than 20 % excess fair value over carrying amount as of our 2024 annual impairment test, this amount is also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

During the fourth quarter of 2024, certain organizational changes were announced that are expected to impact our future internal reporting and reporting units.

We expect to combine the Northern Europe (“NE”) and Continental Europe (“CE”) reporting units into one reporting unit, Western Europe, in an effort to drive efficiencies in our organizational structure and reporting processes.

We anticipate this change will become effective in the first quarter of 2025 and will require us to reallocate the existing goodwill from the former reporting units, NE and CE, into the new reporting unit, Western Europe.

Indefinite-lived intangible assets:

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Impairment losses ( 152 )

Divestitures —

Transfers to definite-lived intangible assets ( 73 )

Translation adjustments and other 175

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Impairment losses ( 1,903 )

Transfers to definite-lived intangible assets ( 73 )

Translation adjustments and other ( 143 )

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Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $ 36.5 billion at December 28, 2024.

As a result of our 2024 annual impairment test as of June 30, 2024, we recognized non-cash intangible asset impairment losses of $ 593 million in SG&A in the third quarter of 2024 related to our Lunchables, Claussen, and Wattie’s brands.

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 560 million in our North America segment and $ 33 million in our International Developed Markets segment, consistent with ownership of the trademarks.

The impairments of the Lunchables and Wattie’s brands were primarily due to a reduction of future year revenue growth and margin assumptions from prior estimates.

The impairment of the Claussen brand was primarily due to a reduction of future year margin assumptions from prior estimates.

After these impairments, the aggregate carrying amount of these brands was $ 1.2 billion.

During the fourth quarter of 2024, we recognized a non-cash intangible asset impairment loss of $ 1.3 billion in SG&A related to our Oscar Mayer brand.

The impairment was due to additional perceived risk in achieving our long-term cash flow forecasts for the meats business.

Brands with 20 % or less fair value over carrying amount had an aggregate carrying amount after impairment of $ 16.8 billion as of the latest test for each brand, brands with 20 - 50 % fair value over carrying amount had an aggregate carrying amount of $ 2.8 billion as of the latest test for each brand, and brands that had over 50 % fair value over carrying amount had an aggregate carrying amount of $ 16.9 billion as of the latest test for each brand.

2023 Indefinite-Lived Intangible Asset Impairment Testing

As a result of our 2023 annual impairment test as of July 2, 2023, we recognized non-cash intangible asset impairment losses of $ 152 million in SG&A in the third quarter of 2023 related to Maxwell House, Cool Whip, and two other brands.

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 139 million in our North America segment and $ 13 million in our International segment, consistent with ownership of the trademarks.

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 139 million in our North America segment and $ 13 million in our International Developed Markets segment, consistent with ownership of the trademarks.

The impairment of these four brands was primarily due to an increase in the discount rate, which was impacted by higher interest rates, a decline in market capitalization, and other market inputs, as well as sustained expectations of declining revenue growth in future years, and decreased margin expectations.

After these impairments, the aggregate carrying amount of these brands was $ 942 million.

As of our 2023 annual impairment test, brands with 20 % or less fair value over carrying amount had an aggregate carrying amount after impairment of $ 18.7 billion, brands with between 20 - 50 % fair value over carrying amount had an aggregate carrying amount of $ 4.2 billion, and brands that had over 50 % fair value over carrying amount had an aggregate carrying amount of $ 15.7 billion.

As part of our 2023 annual impairment test, we reclassified two indefinite-lived intangible assets to definite-lived intangible assets related to trademarks in our International segment that had a history of impairment and expectations of limited capital investment.

As part of our 2023 annual impairment test, we reclassified two indefinite-lived intangible assets to definite-lived intangible assets related to trademarks in our International Developed Markets segment and in Emerging Markets that had a history of impairment and expectations of limited capital investment.

After the fair value assessment of these brands as part of our 2023 annual impairment test, we transferred $ 73 million from indefinite-lived intangible assets to definite-lived trademarks as of July 2, 2023 and recognized six months of amortization expense as of December 30, 2023.

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As a result of our Q3 2022 Annual Impairment Test we recognized a non-cash impairment loss of $ 67 million in SG&A in the third quarter of 2022 related to two brands, Jet Puffed and Plasmon .

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 50 million in our North America segment and $ 17 million in our International segment, consistent with ownership of the trademarks.

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 50 million in our North America segment and $ 17 million in our International Developed Markets segment, consistent with ownership of the trademarks.

The impairment of these brands was primarily due to reduced revenue growth assumptions.

2021 Indefinite-Lived Intangible Asset Impairment Testing

We performed our 2021 annual impairment test as of March 28, 2021, which was the first day of our second quarter in 2021.

As a result of our 2021 annual impairment test, we recognized a non-cash impairment loss of $ 69 million in SG&A in the second quarter of 2021 related to two brands, Plasmon and Maxwell House .

We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $ 45 million in our International segment related to Plasmon and $ 24 million in our North America segment related to Maxwell House , consistent with the ownership of the trademarks.

The impairment of the Plasmon brand was largely due to downward revised revenue expectations for infant nutrition in Italy.

The impairment of the Maxwell House brand was primarily due to downward revised revenue expectations for mainstream coffee in the U.S.

In the fourth quarter of 2021, following the monetization of the licensed portions of the Kraft and Velveeta brands in connection with the closing of the Cheese Transaction, we performed an interim impairment test and utilized the excess earnings method under the income approach to estimate the fair value on these brands as of November 29, 2021, the Cheese Transaction Closing Date.

While the Velveeta brand had a fair value in excess of its carrying amount, the Kraft brand had a fair value below its carrying amount.

Accordingly, we recorded a non-cash impairment loss of $ 1.2 billion in SG&A in the fourth quarter of 2021 related to the Kraft brand.

We recognized this impairment loss in our North America segment, consistent with the ownership of the Kraft trademark.

Additional Indefinite-Lived Intangible Asset Considerations

1 unchanged sentence

Estimating the fair value of individual 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, and SG&A), income tax considerations, discount rates, growth rates, royalty rates, contributory asset charges, and other market factors.

Our current expectations also include certain assumptions that could be negatively impacted if we are unable to meet our pricing expectations in relation to inflation.

These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors.

1 unchanged sentence

Our brands that were impaired in 2024, 2023, and 2022 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 other individual brands that have 20 % or less excess fair value over carrying amount as of our 2023 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Although the remaining brands have more than 20 % excess fair value over carrying amount as of our 2023 annual impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

Accordingly, these and other individual brands that had 20 % or less excess fair value over carrying amount as of our 2024 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Although the remaining brands had more than 20 % excess fair value over carrying amount as of our 2024 annual impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

Definite-lived intangible assets:

8 unchanged sentences

$ 6,070 $ ( 2,427 ) $ 3,643 $ 6,035 $ ( 2,089 ) $ 3,946

In the second quarter of 2024, we entered into an amended license agreement to grant us the exclusive, irrevocable, royalty-free, and perpetual right to use certain TGI Friday trademarks to manufacture, distribute, market, and sell certain TGI Friday licensed products (the “TGI Friday License”).

The total cash consideration related to the TGI Friday License was approximately $ 140 million.

We recognized this TGI Friday License as a definite-lived intangible asset to be amortized over its 27-year useful life.

In the third quarter of 2024, we recognized non-cash definite-lived intangible asset impairment losses of $ 128 million in SG&A related to the Just Spices trademark and customer-related assets.

We utilized the relief from royalty method under the income approach for the trademark and the distributor method under the income approach for the customer-related assets to estimate the fair values and recorded non-cash impairment losses in our Continental Europe reporting unit within our International Developed Markets segment, consistent with ownership of the trademarks and customer-related assets.

The impairments of the Just Spices trademark and the customer-related assets were primarily due to a reduction of future year revenue growth and margin assumptions from prior expectations.

Amortization expense for definite-lived intangible assets was $ 252 million in 2024, $ 251 million in 2023, and $ 261 million in 2022.

Aside from amortization expense, the change in definite-lived intangible assets from December 31, 2022 to December 30, 2023 primarily reflects the transfer of $ 73 million from indefinite-lived intangible assets to definite-lived intangible assets related to the trademarks in our International segment and the impact of foreign currency

In the third quarter of 2022, we recorded $ 7 million of non-cash intangible asset impairment losses to SG&A related to two trademarks in our International segment that had net carrying values that were deemed not to be recoverable.

In the second quarter of 2021, we recorded $ 9 million of non-cash impairment losses to SG&A related to a trademark in our International segment that had a net carrying value that was deemed not to be recoverable.

We estimate that amortization expense related to definite-lived intangible assets will be approximately $ 260 million in 2024 and for the following three years and $ 250 million in 2028.

Aside from amortization expense, the change in definite-lived intangible assets from December 30, 2023 to December 28, 2024 primarily relates to the acquisition of the TGI Friday License, the $ 128 million of non-cash impairment losses related to the Just Spices trademark and customer-related assets within our International Developed Markets segment, and the impacts of foreign currency.

In the third quarter of 2022, we recorded $ 7 million of non-cash intangible asset impairment losses to SG&A related to two trademarks in our former International segment that had net carrying values that were deemed not to be recoverable.

We estimate that amortization expense related to definite-lived intangible assets will be approximately $ 250 million in 2025 and for the following two years and $ 240 million in 2028 and 2029.

Provision for/(Benefit from) Income Taxes:

8 unchanged sentences

state and local 56 88 79

770 876 1,726

federal ( 417 ) 30 ( 192 )

3 unchanged sentences

Total provision for/(benefit from) income taxes $ ( 1,890 ) $ 787 $ 598

The Organization for Economic Co-operation and Development (OECD), a global coalition of member countries, proposed a two-pillar plan that aims to ensure a fairer distribution of profits among countries and impose a floor on tax competition through the introduction of a global minimum tax of 15 %.

Many countries have enacted, or begun the process of enacting, laws based on the two-pillar plan proposals.

As part of our planning for the changes in the international tax environment, as well as to achieve greater operational synergies, we have enacted changes to our corporate entity structure which included a transfer of, and will result in the movement of, certain business operations to a wholly-owned subsidiary in the Netherlands resulting in a tax benefit of $ 3.0 billion recorded as a non-U.S.

deferred tax asset in December 2024.

The deferred tax asset was recognized as a result of the book and tax basis difference on the business transferred to the Netherlands subsidiary with the tax basis determined by reference to the fair value of the business.

The determination of the estimated fair value of the transferred business is complex and requires the exercise of substantial judgment due to the use of subjective assumptions in the valuation method used by management.

The associated valuation allowance of $ 0.6 billion is related to uncertainty in the Pillar Two legislative interpretation and is based on our latest assessment of the total tax benefit that is more likely than not to be realized.

The recognition of our future tax benefits associated with this transaction is dependent upon the acceptance of the business valuation and tax basis step-up by the associated taxing authorities.

We record tax expense/(benefits) related to the exercise of stock options and other equity instruments within our tax provision.

Accordingly, we recognized an insignificant tax expense in our consolidated statements of income in 2023 and an insignificant tax benefit in both 2022 and 2021 related to the exercise of stock options and other equity instruments.

Accordingly, we recognized an insignificant tax expense in our consolidated statements of income in 2024 and 2023, and an insignificant tax benefit in 2022 related to the exercise of stock options and other equity instruments.

Effective Tax Rate:

3 unchanged sentences

federal statutory tax rate 21.0 % 21.0 % 21.0 %

Tax on income of foreign subsidiaries ( 6.6 ) % ( 8.2 ) % ( 12.9 ) %

Tax on income of non-U.S.

( 32.1 ) % ( 6.6 ) % ( 8.2 ) %

state and local income taxes, net of federal tax benefit 0.2 % 1.8 % 1.8 %

2 unchanged sentences

Goodwill impairment 41.3 % 3.6 % 3.9 %

(Losses)/gains related to acquisitions and divestitures — % 0.3 % 12.9 %

Deferred tax effect of tax law changes 0.1 % ( 0.9 ) % 9.8 %

Deferred tax adjustments ( 347.8 ) % 0.1 % ( 1.1 ) %

Other 0.1 % 0.3 % ( 1.1 ) %

Movement of valuation allowances 88.3 % 0.1 % 0.8 %

Deferred tax effect of tax law changes ( 4.8 ) % 0.1 % ( 0.9 ) %

Repatriation costs 3.2 % — % 0.3 %

Foreign income inclusion

1.9 % 0.5 % 0.5 %

Research and development credits ( 1.1 ) % ( 0.3 ) % ( 0.3 ) %

Change in prior year estimates ( 1.8 ) % ( 0.7 ) % ( 1.2 ) %

Equity awards

1.2 % 0.1 % 0.1 %

2.2 % 0.3 % 0.4 %

Effective tax rate ( 220.5 ) % 21.7 % 20.2 %

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.

The provision for income taxes consists of provisions for federal, state, and non-U.S.

income taxes.

We operate in an international environment;

4 unchanged sentences

Additionally, small movements in tax rates due to a change in tax law or a change in tax rates that causes us to revalue our deferred tax balances produces volatility in our effective tax rate.

Our 2024 effective tax rate was a benefit of 220.5 % on pre-tax income.

Our effective tax rate was favorably impacted by recognizing a non-U.S.

deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands and the geographic mix of pre-tax income in various non-U.S.

jurisdictions.

This impact was partly offset by establishing a partial valuation allowance against the Netherlands deferred tax asset and a full valuation allowance against the Brazil net deferred tax assets and non-deductible goodwill impairments.

Our 2023 effective tax rate was an expense of 21.7 % on pre-tax income.

Our effective tax rate was favorably impacted by the geographic mix of pre-tax income in various non-U.S.

Our effective tax rate was favorably impacted by geographic mix of pre-tax income in various non-U.S.

jurisdictions.

These impacts were partially offset by the impact of certain unfavorable rate reconciling items, primarily non-deductible goodwill impairments and the impact of the federal tax on global intangible low-taxed income (“GILTI”).

The 2024 and 2023 year-over-year decrease in the effective tax rate was due primarily to recognizing a non-U.S.

deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands offset by establishing valuation allowances on certain non-U.S.

deferred tax assets in the current year versus the prior year.

Our 2022 effective tax rate was an expense of 20.2 % on pre-tax income.

4 unchanged sentences

The 2023 and 2022 year-over-year increase in the effective tax rate was due primarily to the decrease in deferred tax liabilities due to the merger of certain foreign entities and the revaluation of deferred tax balances due to changes in state tax laws in the prior year versus the current year.

Our 2021 effective tax rate was an expense of 40.1 % on pre-tax income.

Our effective tax rate was unfavorably impacted by rate reconciling items, primarily the tax impacts related to acquisitions and divestitures, which mainly reflect the impacts of the Nuts Transaction and Cheese Transaction, partially offset by 2021 capital losses;

the revaluation of our deferred tax balances due to changes in international and state tax rates, mainly an increase in U.K.

the impact of the federal tax on GILTI;

and non-deductible goodwill impairments.

These impacts were partially offset by a favorable geographic mix of pre-tax income in various non-U.S.

jurisdictions.

The 2022 and 2021 year-over-year decrease in the effective tax rate was due primarily to the tax impacts related to acquisitions and divestitures, which mainly reflect the impacts of the Nuts Transaction and Cheese Transaction, partially offset by 2021 capital losses, and the revaluation of our deferred tax balances due to changes in international and state tax rates, mainly an increase in U.K.

tax rates in the prior year versus the current year.

See Note 8, Goodwill and Intangible Assets , for additional information related to our impairment losses.

See Note 4, Acquisitions and Divestitures , for additional information on our acquisitions and divestitures.

Deferred Income Tax Assets and Liabilities:

2 unchanged sentences

Deferred income tax liabilities:

Intangible assets, net $ 9,967 $ 9,985

Intangible assets

$ 9,310 $ 9,967

Property, plant and equipment, net 673 707

3 unchanged sentences

Deferred income tax assets:

Other employee benefits ( 100 ) ( 111 )

Intangible assets

Deferred income

( 328 ) ( 343 )

Loss carryforwards

( 277 ) ( 270 )

Lease liabilities ( 114 ) ( 119 )

3 unchanged sentences

Net deferred income tax liabilities $ 7,219 $ 10,040

The increase in net deferred income tax liabilities from December 31, 2022 to December 30, 2023 was primarily driven by a legal settlement in 2023 resulting in the removal of the corresponding deferred tax asset.

See Note 15, Commitments and Contingencies , for additional information on the legal settlement.

As of December 30, 2023, foreign operating loss carryforwards totaled $ 810 million.

The decrease in net deferred income tax liabilities from December 30, 2023 to December 28, 2024 was primarily driven by recognizing a non-U.S.

deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands offset by the establishment of a partial valuation allowance of approximately $ 0.6 billion and the establishment of a full valuation allowance on Brazil net deferred tax assets of approximately $ 140 million.

As of December 28, 2024, non-U.S.

operating loss carryforwards totaled $ 836 million.

Of that amount, $ 62 million expire between 2025 and 2036;

the other $ 774 million do not expire.

We have recorded $ 237 million of deferred tax assets related to these foreign operating loss carryforwards.

We have recorded $ 243 million of deferred tax assets related to these non-U.S.

operating loss carryforwards.

Deferred tax assets of $ 21 million have been recorded for U.S.

3 unchanged sentences

Uncertain Tax Positions:

At December 30, 2023, our unrecognized tax benefits for uncertain tax positions were $ 443 million.

As of December 28, 2024, our unrecognized tax benefits for uncertain tax positions were $ 400 million.

If we had recognized all of these benefits, the impact on our effective tax rate would have been $ 374 million.

It is reasonably possible that our unrecognized tax benefits will decrease by as much as $ 82 million in the next 12 months primarily due to the progression of foreign audits in process.

It is reasonably possible that our unrecognized tax benefits will decrease by an insignificant amount in the next 12 months primarily due to the progression of state audits in process.

Our unrecognized tax benefits for uncertain tax positions are included in income taxes payable and other non-current liabilities on our consolidated balance sheets.

8 unchanged sentences

Balance at the end of the period $ 400 $ 443 $ 455

Our unrecognized tax benefits decreased during 2023 mainly related to audit settlements with federal, state, and foreign taxing authorities and statute of limitations expirations partially offset by a net increase for tax positions related to the current and prior years in the U.S.

and certain state and foreign jurisdictions.

Our unrecognized tax benefits increased during 2022 and 2021 mainly as a result of a net increase for tax positions related to the current and prior years in the U.S.

and certain state and foreign jurisdictions, which were partially offset by decreases related to audit settlements with federal, state, and foreign taxing authorities and statute of limitations expirations.

Our unrecognized tax benefits decreased during 2024 mainly related to audit settlements with state, and non-U.S.

taxing authorities and statute of limitations expirations partially offset by a net increase for tax positions related to the current and prior years in the U.S.

and certain state and non-U.S.

jurisdictions.

Our unrecognized tax benefits decreased during 2023 mainly related to audit settlements with federal, state, and non-U.S.

taxing authorities and statute of limitations expirations partially offset by a net increase for tax positions related to the current and prior years in the U.S.

and certain state and non-U.S.

jurisdictions.

Our unrecognized tax benefits increased during 2022 mainly as a result of a net increase for tax positions related to the current and prior years in the U.S.

and certain state and non-U.S.

jurisdictions, which were partially offset by decreases related to audit settlements with certain state and non-U.S.

taxing authorities and statute of limitations expirations.

We include interest and penalties related to uncertain tax positions in our tax provision.

Our provision for/(benefit from) income taxes included a $ 1 million expense in 2023, a $ 20 million expense in 2022, and a $ 9 million expense in 2021 related to interest and penalties.

Our provision for/(benefit from) income taxes included a $ 19 million benefit in 2024, a $ 1 million expense in 2023, and a $ 20 million expense in 2022 related to interest and penalties.

Accrued interest and penalties were $ 83 million as of December 28, 2024 and $ 102 million as of December 30, 2023.

13 unchanged sentences

In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Brazil, Canada, Italy, the Netherlands, the United Kingdom, and the United States.

As of December 30, 2023, we have substantially concluded all national income tax matters through 2021 for the Netherlands, through 2017 for the United States, through 2015 for Canada, through 2014 for Italy, through 2012 for the United Kingdom, and through 2013, with the exception of 2007 and 2008 which are under litigation, for Brazil.

We have substantially concluded all U.S.

As of December 28, 2024, we have substantially concluded all national income tax matters through 2021 for the United Kingdom, through 2018 for the Netherlands, through 2017 for Italy and the United States, through 2016 for Canada, and through 2013 for Brazil, with the exception of 2007 and 2008 which are under litigation.

We have concluded all U.S.

state income tax matters through 2009.

7 unchanged sentences

Divestitures:

Related to the Cheese Transaction, we paid cash taxes of approximately $ 620 million in the second quarter of 2022.

Related to the Nuts Transaction, we paid cash taxes of approximately $ 700 million in the second half of 2021.

In the second quarter of 2022, we paid cash taxes of approximately $ 620 million related to the sale of certain assets and to the licensing of certain trademarks in our global cheese business to Lactalis .

Employees’ Stock Incentive Plans

55 unchanged sentences

Outstanding at December 30, 2023

8,022,540 $ 46.87

Granted 654,724 35.13

1 unchanged sentence

Exercised ( 320,200 ) 26.13

Outstanding at December 30, 2023 8,022,540 46.87 $ 15 4 years

Exercisable at December 30, 2023 5,735,447 50.37 15 2 years

The aggregate intrinsic value of stock options exercised during the period was $ 11 million in 2023 , $ 24 million in 2022 , and $ 23 million in 2021.

Outstanding at December 28, 2024

6,720,421 46.44 $ 4 4 years

Exercisable at December 28, 2024

4,756,292 50.15 4 2 years

The aggregate intrinsic value of stock options exercised during the period was insignificant in 2024 , $ 11 million in 2023 , and $ 24 million in 2022.

Cash received from options exercised was $ 8 million in 2024, $ 43 million in 2023, and $ 57 million in 2022.

3 unchanged sentences

Unvested options at December 30, 2023

2,287,093 $ 7.04

Granted 654,724 6.46

2 unchanged sentences

Unvested options at December 28, 2024

1,964,129 7.01

Restricted Stock Units

10 unchanged sentences

Outstanding at December 30, 2023

7,722,870 $ 36.80

Granted 3,171,590 35.39

2 unchanged sentences

Outstanding at December 28, 2024

6,705,507 37.31

The aggregate fair value of RSUs that vested during the period was $ 119 million in 2024, $ 134 million in 2023, and $ 163 million in 2022.

16 unchanged sentences

Outstanding at December 30, 2023

4,855,432 $ 33.65

Granted 2,591,382 29.14

2 unchanged sentences

Outstanding at December 28, 2024

5,389,930 31.77

The aggregate fair value of PSUs that vested during the period was $ 40 million in 2024, $ 33 million in 2023, and $ 58 million in 2022.

5 unchanged sentences

After-tax compensation cost $ 85 $ 109 $ 114

Unrecognized compensation cost related to unvested equity awards was $ 222 million at December 30, 2023 and is expected to be recognized over a weighted average period of two years .

Unrecognized compensation cost related to unvested equity awards was $ 176 million at December 28, 2024 and is expected to be recognized over a weighted average period of 2 years.

Postemployment Benefits

11 unchanged sentences

Pension Plans

In 2023, we settled one of our U.K.

defined benefit pension plans, which resulted in pre-tax losses of $ 162 million, including settlement charges of $ 146 million and $ 16 million in other related costs, which were recorded in other expense/income.

Additionally, the settlement of this plan impacted the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets associated with our non-U.S.

pension plans.

At December 30, 2023, we had a net surplus asset of approximately $ 27 million remaining in the related trust that is reflected in the fair value of plan assets for non-U.S.

plans at December 30, 2023.

Obligations and Funded Status:

The projected benefit obligations, fair value of plan assets, and funded status of our pension plans were (in millions):

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

24 unchanged sentences

(b) Settlements represent the settlement of our pension benefit obligation of $ 282 million for one of our U.K.

pension plans in 2023 and lump sum payments of $ 222 million in 2022.

pension plans in 2023.

The accumulated benefit obligation, which represents benefits earned to the measurement date, was $ 2.5 billion at December 28, 2024 and $ 2.7 billion at December 30, 2023 for the U.S.

pension plans.

pension plan.

The accumulated benefit obligation for the non-U.S.

8 unchanged sentences

Net pension asset/(liability) recognized $ 815 $ 776

We expect a return of net surplus assets of approximately $ 27 million in 2024 related to our U.K.

pension plan settlement.

For certain of our U.S.

plans that were underfunded based on accumulated benefit obligations in excess of plan assets, the projected benefit obligations, accumulated benefit obligations, and the fair value of plan assets were (in millions):

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

2 unchanged sentences

Fair value of plan assets — — 17 31

All of our U.S.

plans were overfunded based on plan assets in excess of accumulated benefit obligations as of December 30, 2023 and December 31, 2022.

plan was overfunded based on plan assets in excess of accumulated benefit obligations as of December 28, 2024 and December 30, 2023.

For certain of our U.S.

plans that were underfunded based on projected benefit obligations in excess of plan assets, the projected benefit obligations, accumulated benefit obligations, and the fair value of plan assets were (in millions):

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

2 unchanged sentences

Fair value of plan assets — — 31 31

All of our U.S.

plans were overfunded based on plan assets in excess of projected benefit obligations as of December 30, 2023 and December 31, 2022.

plan was overfunded based on plan assets in excess of projected benefit obligations as of December 28, 2024 and December 30, 2023.

We used the following weighted average assumptions to determine our projected benefit obligations under the pension plans:

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

5 unchanged sentences

Net pension cost/(benefit) consisted of the following (in millions):

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 31, 2022 December 28, 2024 December 30, 2023 December 31, 2022

11 unchanged sentences

defined benefit pension plans, which resulted in pre-tax losses of $ 162 million within other expense/(income).

In 2021, we recognized special/contractual termination benefits for our U.S plans related to the Nuts Transaction, including a loss of $ 3 million.

These special/contractual termination benefits are recorded in other expense/(income) as a component of our pre-tax loss/(gain) on sale of business on the consolidated statement of income for the year ended December 25, 2021.

We used the following weighted average assumptions to determine our net pension costs for the years ended:

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 31, 2022 December 28, 2024 December 30, 2023 December 31, 2022

15 unchanged sentences

Our weighted average asset allocations were:

Plans Non-U.S.

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

5 unchanged sentences

Total 100 % 100 % 100 % 100 %

Our pension investment strategy for U.S.

plans is designed to align our pension assets with our projected benefit obligation to reduce volatility.

Our pension investment strategy for the U.S.

plan is designed to align our pension assets with our projected benefit obligation to reduce volatility.

We target an investment of approximately 75 % of our U.S.

plan assets in fixed-income securities, approximately 15 % in alternatives, primarily real assets and diversified credit, and approximately 10 % in return-seeking assets, primarily equity securities.

Prior to 2022, we targeted an investment of approximately 85 % of our U.S.

plan assets in fixed-income securities and approximately 15 % in return-seeking assets, primarily equity securities.

For pension plans outside the United States, our investment strategy is subject to local regulations and the asset/liability profiles of the plans in each individual country.

82 unchanged sentences

Asset Category December 31, 2022 Additions Net Realized Gain/(Loss) Net Unrealized Gain/(Loss) Net Purchases, Issuances and Settlements Transfers Into/(Out of) Level 3 December 30, 2023

Real estate $ 6 $ — $ 2 $ ( 5 ) $ ( 3 ) $ — $ —

Certain insurance contracts 275 — 45 2 ( 295 ) — 27

4 unchanged sentences

We did no t contribute to our U.S.

pension plans.

pension plan.

We estimate that 2025 pension contributions will be approximately $ 6 million to our non-U.S.

1 unchanged sentence

We do no t plan to make contributions to our U.S.

pension plans in 2024.

pension plan in 2025.

Estimated future contributions take into consideration current economic conditions, which at this time are expected to have minimal impact on expected contributions for 2025.

Our actual contributions and plans may change due to many factors, including changes in tax, employee benefit, or other laws and regulations, tax deductibility, significant differences between expected and actual pension asset performance or interest rates, or other factors.

In 2023, we settled one of our U.K.

defined benefit pension plans, which resulted in a surplus asset.

During the third quarter of 2024, the surplus asset was distributed to Kraft Heinz as a negative contribution in the amount of $ 29 million net of tax, which is shown as a cash inflow on the Consolidated Statements of Cash Flows.

Future Benefit Payments:

The estimated future benefit payments from our pension plans at December 28, 2024 were (in millions):

Plans Non-U.S.

2025 $ 261 $ 74

15 unchanged sentences

Actual return on plan assets 75 101

Employer contributions 11 12

Employer contributions (b)

Benefits paid ( 69 ) ( 73 )

2 unchanged sentences

(a) Actuarial losses/(gains) were primarily due to a change in the discount rate assumption utilized in measuring plan obligations.

(b) Refer to the Employer Contributions section within this footnote below for further discussion of the negative employer contributions in 2024.

We recognized the net postretirement benefit asset/(liability) on our consolidated balance sheets as follows (in millions):

28 unchanged sentences

We present all non-service cost components of net postretirement cost/(benefit) within other expense/(income) on our consolidated statements of income.

In 2021, we recognized a curtailment gain of $ 4 million related to the Nuts Transaction.

This gain is recorded in other expense/(income) as a component of our pre-tax loss/(gain) on sale of business on the consolidated statement of income for the year ended December 25, 2021.

We used the following weighted average assumptions to determine our net postretirement benefit plans cost for the years ended:

26 unchanged sentences

Equity securities 151 151 — —

Cash and cash equivalents 1 1 — —

Fair value excluding investments measured at net asset value 655 227 428 —

9 unchanged sentences

Equity securities 137 137 — —

Cash and cash equivalents 1 1 — —

Fair value excluding investments measured at net asset value 673 220 453 —

41 unchanged sentences

Our actual contributions and plans may change due to many factors, including changes in tax, employee benefit, or other laws and regulations, tax deductibility, significant differences between expected and actual postretirement plan asset performance or interest rates, or other factors.

During the fourth quarter of 2024, we amended the U.S.

postretirement medical plan to establish a sub-trust to permit the payment of certain benefits for active union employees using $ 150 million of the retiree plan surplus, which represents a portion of the retiree plan’s total surplus.

This amount was converted to cash and treated as a negative contribution which is shown as a cash inflow in operating activities on the consolidated statement of cash flows.

As a result of its designation for this purpose, the transferred amount is no longer considered an asset of the retiree plan and is recorded in restricted cash under other current assets and other non-current assets within the consolidated balance sheets.

Future Benefit Payments:

Our estimated future benefit payments for our postretirement plans at December 28, 2024 were (in millions):

2029-2033 265

We sponsor and contribute to employee savings plans that cover eligible salaried, non-union, and union employees.

13 unchanged sentences

Net actuarial gains/(losses) arising during the period - Postretirement Benefits 58 67 ( 44 )

Prior service credits/(costs) arising during the period - Pension Benefits ( 9 ) — —

36 ( 78 ) ( 512 )

59 unchanged sentences

(b) At December 30, 2023, the fair value of our derivative assets was recorded in other current assets ($ 37 million) and other non-current assets ($ 103 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($ 31 million) and other non-current liabilities ($ 134 million).

(c) At December 31, 2022, the fair value of our derivative assets was recorded in other current assets and the fair value of derivative liabilities was recorded in other current liabilities.

(c) At December 30, 2023, the fair value of our derivative assets was recorded in other current assets and the fair value of derivative liabilities was recorded in other current liabilities ($ 64 million) and other non-current liabilities ($ 2 million).

Our derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract.

14 unchanged sentences

• Non-derivative foreign currency denominated debt with principal amounts of € 300 million and £ 400 million;

• Cross-currency contracts with notional amounts of C$ 1.4 billion ($ 1.0 billion), € 2.3 billion ($ 2.5 billion), and JPY 9.6 billion ($ 68 million).

We periodically use non-derivative instruments such as non-U.S.

dollar financing transactions or non-U.S.

dollar assets or liabilities, including intercompany loans, to hedge the exposure of changes in underlying foreign currency denominated subsidiary net assets, and they are designated as net investment hedges.

At December 30, 2023, we had euro intercompany loans with an aggregate notional amount of $ 800 million designed as net investment hedges.

The component of the gains and losses on our net investment in these designated foreign operations, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our cross-currency contracts and foreign exchange contracts and remeasurements of our foreign currency denominated debt.

Interest Rate Hedging:

From time to time we have had derivatives designated as interest rate hedges, including interest rate swaps and treasury locks.

We no longer have any outstanding interest rate swaps or treasury locks.

We continue to amortize the realized hedge losses that were deferred into accumulated other comprehensive income/(losses) into interest expense through the original maturity of the related long-term debt instruments.

• Cross-currency contracts with notional amounts of C$ 1.4 billion ($ 1.0 billion), € 2.8 billion ($ 3.0 billion), JPY 9.6 billion ($ 68 million), and CNY 2.5 billion ($ 344 million).

Cash Flow Hedge Coverage:

At December 30, 2023, we had entered into foreign exchange contracts designated as cash flow hedges for periods not exceeding the next 25 months and into cross-currency contracts designated as cash flow hedges for periods not exceeding the next 53 months.

Deferred Hedging Gains and Losses on Cash Flow Hedges:

Based on our valuation at December 30, 2023 and assuming market rates remain constant through contract maturities, we expect transfers to net income/(loss) of the existing losses reported in accumulated other comprehensive income/(losses) during the next 12 months on foreign currency cash flow hedges, cross-currency cash flow hedges, and interest rate cash flow hedges to be insignificant.

At December 28, 2024, we had entered into foreign exchange contracts designated as cash flow hedges for periods not exceeding the next 3 years and into cross-currency contracts designated as cash flow hedges for periods not exceeding the next 5 years.

Fair Value Hedge Coverage:

In 2024, we designated cross-currency contracts as fair value hedges of the foreign currency exposure of foreign currency denominated intercompany loans.

At December 28, 2024, the notional amounts of the cross-currency contracts were £ 683 million ($ 864 million) and MXN 4.8 billion ($ 251 million) and the carrying value of the hedged items was $ 1.1 billion.

The gains/(losses) on the hedged items, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our cross-currency contract, which is reported in the same income statement line item in the same period.

The amounts excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis in the same line item as the hedged items.

Deferred Hedging Gains and Losses on Fair Value and Cash Flow Hedges:

Based on our valuation at December 28, 2024 and assuming market rates remain constant through contract maturities, we expect transfers to net income/(loss) of the existing losses reported in accumulated other comprehensive income/(losses) on interest rate cash flow hedges and cross-currency fair value hedges during the next 12 months to be insignificant.

Additionally, we expect transfers to net income/(loss) of the existing gains reported in accumulated other comprehensive income/(losses) during the next 12 months on foreign-currency cash flow hedges to be approximately $ 26 million and on cross-currency cash flow hedges to be insignificant.

Concentration of Credit Risk:

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The related derivative gains were $ 38 million, and were recorded within other expense/(income).

These gains are classified as other losses/(gains) related to acquisitions and divestitures.

The related cash flows were classified as cash inflows from investing activities on the consolidated statement of cash flows.

These gains are classified as other losses/

(gains) related to acquisitions and divestitures.

See Note 4, Acquisitions and Divestitures , for additional information related to the Hemmer Acquisition.

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Cross-currency contracts (excluded component) 49 35 42 Interest expense

Fair value hedges:

Cross-currency contracts (excluded component)

( 37 ) — — Other expense/(income)

Total gains/(losses) recognized in statements of comprehensive income $ 141 $ ( 43 ) $ 284

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December 28, 2024 December 30, 2023

Cost of products sold Interest expense Other expense/ (income) Cost of products sold SG&A Interest expense Other expense/ (income)

Cost of products sold Interest expense Other expense/ (income) Cost of products sold Interest expense Other expense/ (income)

Total amounts presented in the consolidated statements of income in which the following effects were recorded $ 16,878 $ 912 $ ( 85 ) $ 17,714 $ 912 $ 27

Gains/(losses) related to derivatives designated as hedging instruments:

Cash flow hedges:

Cash flow hedges (a) :

Foreign exchange contracts $ 13 $ — $ 45 $ 38 $ — $ ( 20 )

Foreign exchange contracts (excluded component) ( 6 ) — 9 ( 10 ) — —

Interest rate contracts — — — — — ( 1 ) —

Cross-currency contracts — ( 30 ) ( 111 ) — ( 27 ) 63

Cross-currency contracts (excluded component) — — — — — 25

Net investment hedges:

Net investment hedges (a) :

Foreign exchange contracts (excluded component) — 1 — — 1 —

Cross-currency contracts (excluded component) — 49 — — 34 —

Fair Value hedges:

Cross-currency contracts — — ( 1 ) — — —

Cross-currency contracts (excluded component) (b)

Hedged items (b)

Gains/(losses) related to derivatives not designated as hedging instruments:

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Foreign exchange contracts — — 38 — — ( 12 )

Interest rate contracts (c)

— — (3) — — —

Cross-currency contracts — — ( 27 ) — — 3

Total gains/(losses) recognized in statements of income $ ( 13 ) $ 20 $ ( 45 ) $ ( 82 ) $ 8 $ 59

(a) Represents the pre-tax amounts of derivative gains/(losses) reclassified from accumulated other comprehensive income/(losses) to net income/(loss).

(b) Represents the pre-tax amounts of the hedged items gains/(losses) in fair value hedges.

(c) Represents recognition of realized hedge losses resulting from the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring.

December 31, 2022

Net sales Cost of products sold SG&A Interest expense Other expense/ (income)

Cost of products sold SG&A Interest expense Other expense/ (income)

Total amounts presented in the consolidated statements of income in which the following effects were recorded $ 18,363 $ 4,488 $ 921 $ ( 253 )

Gains/(losses) related to derivatives designated as hedging instruments:

Cash flow hedges:

Cash flow hedges (a) :

Foreign exchange contracts $ ( 2 ) $ 2 $ — $ —

Foreign exchange contracts (excluded component) ( 7 ) — — —

Interest rate contracts — — ( 1 ) —

Cross-currency contracts — — ( 28 ) ( 54 )

Cross-currency contracts (excluded component) — — — 30

Net investment hedges:

Net investment hedges (a) :

Foreign exchange contracts (excluded component) — — ( 1 ) —

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Foreign exchange contracts — — — ( 26 )

Cross-currency contracts — — — — 9

Total gains/(losses) recognized in statements of income $ 77 $ 2 $ 7 $ ( 50 )

(a) Represents the pre-tax amounts of derivative gains/(losses) reclassified from accumulated other comprehensive income/(losses) to net income/(loss).

Non-Derivative Impact on Statements of Comprehensive Income:

Related to our non-derivative foreign currency denominated debt instruments designated as net investment hedges, we recognized pre-tax losses of $ 39 million in 2023, pre-tax gains of $ 111 million in 2022, and pre-tax gains of $ 75 million in 2021.

Related to our non-derivative foreign currency denominated debt instruments designated as net investment hedges, we recognized pre-tax gains of $ 37 million in 2024, pre-tax losses of $ 39 million in 2023, and pre-tax gains of $ 111 million in 2022.

These amounts were recognized in other comprehensive income/(loss).

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The components of, and changes in, accumulated other comprehensive income/(losses), net of tax, were as follows (in millions):

Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total

Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Net Fair Value Hedges Total

Balance at December 25, 2021 $ ( 2,285 ) $ 364 $ 97 $ — $ ( 1,824 )

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Net actuarial gains/(losses) arising during the period — ( 70 ) — — ( 70 )

Prior service credits/(costs) arising during the period — — — — —

Net postemployment benefit losses/(gains) reclassified to net income/(loss) — 115 — — 115

Other activity 22 — ( 22 ) — —

Total other comprehensive income/(loss) 211 45 ( 50 ) — 206

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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 )

Other activity 22 — ( 22 ) —

Total other comprehensive income/(loss) ( 365 ) 14 66 (26) ( 311 )

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Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) 83 ( 44 ) 39 ( 69 ) 19 ( 50 ) 60 ( 34 ) 26

Amounts excluded from the effectiveness assessment of fair value hedges ( 37 ) 14 ( 23 ) — — — — — —

Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) ( 4 ) 1 ( 3 ) — — — — — —

Net actuarial gains/(losses) arising during the period 45 ( 10 ) 35 ( 78 ) 8 ( 70 ) ( 512 ) 126 ( 386 )

Prior service credits/(costs) arising during the period ( 9 ) 2 ( 7 ) — — — — — —

Net postemployment benefit losses/(gains) reclassified to net income/(loss) ( 19 ) 5 ( 14 ) 128 ( 13 ) 115 ( 13 ) 5 ( 8 )

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Foreign exchange contracts (b)

— — 1 Net sales

Foreign exchange contracts (b)

( 7 ) ( 28 ) 9 Cost of products sold

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Interest rate contracts (c)

3 — — Other expense/(income

Interest rate contracts (d)

— — 1 Interest expense

Losses/(gains) on fair value hedges:

Cross-currency contracts (e)

( 4 ) — — Other expense/(income

Losses/(gains) on hedges before income taxes 29 ( 104 ) 24

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Losses/(gains) on postemployment benefits:

Amortization of unrecognized losses/(gains) (d)

$ ( 4 ) $ ( 14 ) $ ( 13 )

Amortization of prior service costs/(credits) (d)

Amortization of unrecognized losses/(gains) (f)

$ ( 9 ) $ ( 4 ) $ ( 14 )

Settlement and curtailment losses/(gains) (d)

Amortization of prior service costs/(credits) (f)

( 10 ) ( 14 ) ( 14 )

Settlement and curtailment losses/(gains) (f)

Losses/(gains) on postemployment benefits before income taxes ( 19 ) 128 ( 13 )

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(b) Includes amortization of the excluded component and the effective portion of the related hedges.

(c) Represents amortization of realized hedge losses that were deferred into accumulated other comprehensive income/(losses) through the maturity of the related long-term debt instruments.

(d) These components are included in the computation of net periodic postemployment benefit costs.

(c) Represents recognition of realized hedge losses resulting from the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring.

(d) Represents amortization of realized hedge losses that were deferred into accumulated other comprehensive income/(losses) through the maturity of the related long-term debt instruments.

(e) Represents amortization of the excluded component.

(f) These components are included in the computation of net periodic postemployment benefit costs.

See Note 11, Postemployment Benefits , for additional information.

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Financing Arrangements

Product Financing Arrangements:

We enter into various product financing arrangements to facilitate supply from our vendors.

Balance sheet classification is based on the nature of the arrangements.

We have concluded that our obligations to our suppliers, including amounts due and scheduled payment terms, are impacted by their participation in the program and therefore we classify amounts outstanding within other current liabilities on our consolidated balance sheets.

We had an insignificant amount at December 30, 2023 and approximately $ 87 million at December 31, 2022 on our consolidated balance sheets related to these arrangements.

Transfers of Financial Assets:

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We account for the transfer of receivables as a true sale at the point control is transferred through derecognition of the receivable on our consolidated balance sheet.

The accounts receivable factoring program was not utilized in 2024 as there were no receivables sold under the program during 2024, and no amounts were outstanding as of December 28, 2024.

There were no incremental costs of factoring receivables under this arrangement for the year ended December 28, 2024.

Receivables sold under this accounts receivable factoring program were approximately $ 863 million during 2023, with no amounts outstanding as of December 30, 2023.

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The incremental costs of factoring receivables under this arrangement were insignificant for the year ended December 31, 2022.

No receivables were sold under this accounts receivable factoring program during 2021.

The proceeds from the sales of receivables are included in cash from operating activities in the consolidated statement of cash flows.

As of December 28, 2024, the Company has elected not to renew the accounts receivable factoring program.

There were no outstanding obligations at the time the program was terminated.

Trade Payables Programs:

In order to manage our cash flow and related liquidity, we work with our suppliers to optimize our terms and conditions, which include the extension of payment terms.

Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 220 days.

We also maintain agreements with third-party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell one or more of those payment obligations to participating financial institutions.

We maintain agreements with third-party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell one or more of those payment obligations to participating financial institutions.

We have no economic interest in a supplier’s decision to enter into these agreements and no direct financial relationship with the financial institutions related to these programs.

We pledged no assets in connection with our trade payable programs.

We pledged no assets or other forms of guarantees in connection with our trade payable programs.

Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted.

Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 250 days.

All amounts due to participating suppliers are paid to the third party on the original invoice due dates, regardless of whether a particular invoice was sold.

Supplier participation in these agreements is voluntary.

We estimate that the amounts outstanding under these programs were $ 0.8 billion at December 30, 2023 and $ 1.1 billion at December 31, 2022.

The amounts confirmed outstanding under these programs were $ 745 million at December 28, 2024 and $ 819 million at December 30, 2023.

The amounts were included in trade payables on our consolidated balance sheets.

During 2024, we added $ 2,669 million of obligations to these programs and settled $ 2,743 million of obligations.

Changes in the amounts outstanding on our trade payables programs, were (in millions):

Ending Balance at December 30, 2023

Obligations confirmed

Confirmed obligations settled

Ending Balance at December 28, 2024

Commitments and Contingencies

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Related to that agreement, we recorded a net expense of $ 210 million within SG&A in our consolidated statements of income for the fourth quarter of 2022, representative of the Company’s then-estimated liability after insurance recoveries and contributions from other defendants.

The Company’s then-estimated liability and the insurance recoveries are reflected in current liabilities and current assets on the condensed consolidated balance sheets at December 31, 2022.

The Company’s then-estimated liability and the insurance recoveries are reflected in current liabilities and current assets on the consolidated balance sheets at December 31, 2022.

In the third quarter of 2023, we paid our remaining liability after insurance recoveries.

On September 12, 2023, the United States District Court for the Northern District of Illinois issued a Judgment Approving Class Action Settlement, wherein it granted final approval of the class settlement and dismissed the lawsuit with prejudice.

Certain of The Kraft Heinz Company’s current and former officers and directors and the 3G Entities are named as defendants in two stockholder derivative actions pending in the Delaware Court of Chancery, Datnoff, et al.

Certain of The Kraft Heinz Company’s current and former officers and directors and the 3G Entities were named as defendants in two stockholder derivative actions previously pending in the Delaware Court of Chancery, Datnoff, et al.

Behring, et al.

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, which was filed on March 6, 2023.

The complaints allege state law claims and contend that The Kraft Heinz Company’s Board of Directors wrongfully refused plaintiffs’ demands to pursue legal action against the named defendants.

Specifically, the complaints allege that certain of the Company’s current and former officers and directors breached their fiduciary duties to the Company by purportedly making materially misleading statements and omissions regarding the Company’s financial performance and the impairment of its goodwill and intangible assets.

The complaints further allege that the 3G Entities and certain of the Company’s current and former officers and directors breached their fiduciary duties by engaging in insider trading and misappropriating the Company’s material, non-public information, or aided and abetted such alleged breaches of fiduciary duty.

The complaints seek relief against the defendants, principally in the form of damages, disgorgement of all profits obtained from the alleged insider trading, contribution and indemnification, and an award of attorneys’ fees and costs.

We intend to vigorously defend against these lawsuits;

however, we cannot reasonably estimate the potential range of loss, if any, due to the early stage of the proceedings.

The complaints alleged state law claims and contended that The Kraft Heinz Company’s Board of Directors wrongfully refused plaintiffs’ demands to pursue legal action against the named defendants.

Specifically, the complaints alleged that certain of the Company’s current and former officers and directors breached their fiduciary duties to the Company by purportedly making materially misleading statements and omissions regarding the Company’s financial performance and the impairment of its goodwill and intangible assets.

The complaints further alleged that the 3G Entities and certain of the Company’s current and former officers and directors breached their fiduciary duties by engaging in insider trading and misappropriating the Company’s material, non-public information, or aided and abetted such alleged breaches of fiduciary duty.

The complaints sought relief against the defendants, principally in the form of damages, disgorgement of all profits obtained from the alleged insider trading, contribution and indemnification, and an award of attorneys’ fees and costs.

The defendants filed a motion to dismiss the complaints, which the Delaware Chancery Court granted in an order dated July 23, 2024, dismissing the complaints with prejudice.

The plaintiffs filed a notice of appeal on August 19, 2024, followed by a notice of voluntary dismissal of the appeal on September 3, 2024.

The Delaware Supreme Court closed the case on September 4, 2024, formally concluding this matter in full.

Certain of The Kraft Heinz Company’s current and former officers and directors and the 3G Entities were also named as defendants in a consolidated stockholder derivative action, In re Kraft Heinz Company Derivative Litigation , which was filed in the Delaware Court of Chancery.

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Specifically, the plaintiff alleges the 3G Entities caused the Company to make false and misleading public disclosures regarding the independence of two directors of The Kraft Heinz Company, one of whose independence plaintiff contends formed a basis for the court’s prior dismissal of the consolidated amended complaint.

The defendants filed a motion to dismiss the complaint, which the Delaware Chancery Court granted in an order dated August 8, 2024, dismissing the complaint with prejudice.

The plaintiff filed a notice of appeal on September 5, 2024.

We intend to vigorously defend against this lawsuit;

however, we cannot reasonably estimate the potential range of loss, if any, due to the early stage of the proceedings.

2021 United States Government Settlement:

On September 3, 2021, The Kraft Heinz Company reached a settlement with the SEC, concluding and resolving in its entirety the previously disclosed SEC investigation.

Under the terms of the settlement, we, without admitting or denying the findings in the administrative order issued by the SEC, agreed to pay a civil penalty of $ 62 million and to cease and desist from violations of specified provisions of the federal securities laws and rules promulgated thereunder.

We recognized the full amount of the penalty in the second quarter of 2021 in SG&A, and paid the penalty in the third quarter of 2021.

Environmental Actions:

Since March 2024, the Company has been engaged in ongoing discussions with the U.S.

Department of Justice, joined by the U.S.

Environmental Protection Agency (“U.S.

EPA”) and the Indiana Department of Environmental Management, concerning alleged violations of the Clean Water Act related to a Company facility in Kendallville, Indiana.

Previously, the Company entered into an Administrative Order on Consent with the U.S.

EPA that requires the Company to implement a compliance plan to address related alleged violations of the Clean Water Act related to the facility in Kendallville, Indiana.

While we cannot predict with certainty the resolution of these discussions, we do not expect that the ultimate costs to resolve this matter will have a material adverse effect on our financial condition, results of operations, or cash flows.

Other Commitments and Contingencies

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Borrowing Arrangements:

In July 2022, together with Kraft Heinz Foods Company (“KHFC”), our 100% owned operating subsidiary, we entered into a new credit agreement (the “Credit Agreement”), which provides for a five-year senior unsecured revolving credit facility in an aggregate amount of $ 4.0 billion (the “Senior Credit Facility”) and replaced our then-existing credit facility (the “Previous Senior Credit Facility”).

On July 21, 2023, we entered into an agreement to extend the maturity date of our Senior Credit Facility from July 8, 2027 to July 8, 2028.

Together with Kraft Heinz Foods Company (“KHFC”), our 100% owned operating subsidiary, we have a credit agreement (the “Credit Agreement”), which provides for a five-year senior unsecured revolving credit facility in an aggregate amount of $ 4.0 billion (the “Senior Credit Facility”).

On September 27, 2024, we entered into an agreement to extend the maturity date of our Senior Credit Facility from July 8, 2028 to July 8, 2029.

The Credit Agreement includes a $ 1.0 billion sublimit for borrowings in Canadian dollars, euro, or British pound sterling, as well as a swingline sub-facility of up to $ 400 million, and a letter of credit sub-facility of up to $ 300 million.

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No amounts were drawn on our Senior Credit Facility at December 28, 2024 or December 30, 2023.

No amounts were drawn on our Senior Credit Facility during the years ended December 30, 2023 or December 31, 2022, or on the Previous Senior Credit Facility during the years ended December 31, 2022 and December 25, 2021.

No amounts were drawn on our Senior Credit Facility during the years ended December 28, 2024 or December 30, 2023.

From time to time, we obtain funding through our commercial paper programs.

We had no commercial paper outstanding at December 28, 2024 or at December 30, 2023.

Under our US commercial paper program, the maximum amount of commercial paper outstanding was $ 150 million and $ 198 million during the years ended December 30, 2023 and December 31, 2022.

We had no commercial paper outstanding during the year ended December 28, 2024, and the maximum amount of commercial paper outstanding was $ 150 million during the year ended and December 30, 2023.

Long-Term Debt:

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Senior Notes 2025–2029

2.250 %– 3.532 %

British pound sterling notes:

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Senior Notes July 1, 2027 4.125 %

Other long-term debt Various 2024–2035 0.500 %– 16.800 %

Various 2025–2035

0.170 %– 16.350 %

Finance lease obligations 151 145

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Related to the 2022 Repurchases, we recognized a debt prepayment and extinguishment benefit of $ 10 million on the consolidated statement of cash flows for the year ended December 31, 2022, which reflect the $ 38 million net gain on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $ 33 million, unamortized debt issuance costs of $ 3 million, and unamortized discounts of $ 2 million.

2021 Open Market Debt Repurchases

In 2021, we repurchased approximately $ 738 million of certain of our senior notes under Rule 10b5-1 plans, including $ 207 million in the second quarter of 2021 (the “Q2 2021 Repurchases”), $ 221 million in the third quarter of 2021 (the “Q3 2021 Repurchases”), and $ 310 million in the fourth quarter of 2021 (the “Q4 2021 Repurchases” and, together with the Q2 2021 Repurchases and the Q3 2021 Repurchases, the “2021 Repurchases”).

In connection with the 2021 Repurchases, we recognized a loss on extinguishment of debt of approximately $ 152 million within interest expense on the consolidated statement of income for the year ended December 25, 2021.

These losses primarily reflect the payment of premiums associated with the repurchases as well as the write-off of unamortized debt issuance costs, premiums, and discounts.

Related to the 2021 Repurchases, we recognized debt prepayment and extinguishment costs of $ 162 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflect the $ 152 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $ 15 million, unamortized discounts of $ 2 million, and unamortized debt issuance costs of $ 3 million.

Tender Offers:

2021 Tender Offers

In February 2021, KHFC commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $ 1.0 billion, including principal and premium but excluding accrued and unpaid interest (the “Q1 2021 Maximum Tender Amount”), of its outstanding 3.950 % senior notes due July 2025, 3.000 % senior notes due June 2026, 4.000 % senior notes due June 2023, and 3.500 % senior notes due June 2022 (the “Q1 2021 Tender Offer”), listed in order of priority.

Based on participation, KHFC elected to settle the Q1 2021 Tender Offer on the early settlement date, March 9, 2021.

Since the aggregate purchase price of the senior notes validly tendered and not validly withdrawn as of the early tender time exceeded the Q1 2021 Maximum Tender Amount, we did not accept for purchase any of the 3.500 % senior notes due June 2022 or the 4.000 % senior notes due June 2023.

The aggregate principal amount of senior notes validly tendered and accepted was approximately $ 900 million.

In June 2021, KHFC commenced cash tender offers to purchase up to the maximum combined aggregate purchase price of $ 2.8 billion, including principal and premium but excluding accrued and unpaid interest, of its 5.000 % senior notes due June 2042, 5.000 % senior notes due July 2035, 4.625 % senior notes due January 2029, 4.625 % senior notes due October 2039, 3.750 % senior notes due April 2030, 6.500 % senior notes due February 2040, 6.375 % senior notes due July 2028, 6.750 % senior notes due March 2032, 6.875 % senior notes due January 2039, and 7.125 % senior notes due August 2039 (the “Q2 2021 Tender Offers”), listed in order of priority.

KHFC settled the Q2 2021 Tender Offers on June 14, 2021 and June 16, 2021.

The aggregate principal amount of senior notes validly tendered and accepted was approximately $ 1.4 billion.

In November 2021, KHFC commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $ 2.0 billion, including principal and premium but excluding accrued and unpaid interest (the “Q4 2021 Maximum Tender Amount”), of its 3.500 % senior notes due June 2022, 4.625 % senior notes due January 2029, 4.250 % senior notes due March 2031, 6.750 % senior notes due March 2032, 5.000 % senior notes due July 2035, 6.500 % senior notes due February 2040, 5.000 % senior notes due June 2042, 5.200 % senior notes due July 2045, 6.875 % senior notes due January 2039, 7.125 % senior notes due August 2039, 5.500 % senior notes due June 2050, and 4.875 % senior notes due October 2049 (the “Q4 2021 Tender Offer” and, together with the Q1 2021 Tender Offer and the Q2 2021 Tender Offers, the “2021 Tender Offers”), listed in order of priority.

KHFC settled the Q4 2021 Tender Offer on December 6, 2021.

Since the aggregate purchase price of the senior notes validly tendered and not validly withdrawn as of the early tender time exceeded the Q4 2021 Maximum Tender Amount, we did not accept for purchase any of the 6.500 % senior notes due February 2040, 5.000 % senior notes due June 2042, 5.200 % senior notes due July 2045, 6.875 % senior notes due January 2039, 7.125 % senior notes due August 2039, 5.500 % senior notes due June 2050, and 4.875 % senior notes due October 2049.

The aggregate principal amount of senior notes validly tendered and accepted was approximately $ 1.7 billion.

Related to the 2021 Tender Offers, we recognized a loss on extinguishment of debt of $ 636 million within interest expense on the consolidated statement of income for the year ended December 25, 2021.

These losses primarily reflect the payment of early tender premiums and fees associated with the 2021 Tender Offers as well as the write-off of unamortized premiums, debt issuance costs, and discounts.

Related to the 2021 Tender Offers, we recognized debt prepayment and extinguishment costs of $ 636 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflects the $ 636 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized premiums of $ 24 million, unamortized debt issuance costs of $ 17 million, and unamortized discounts of $ 7 million.

Debt Redemptions:

2021 Debt Redemptions

In April 2021, KHFC issued a notice of redemption of all of its 4.000 % senior notes due June 2023, effective May 1, 2021 (the “Q2 2021 Debt Redemption”).

Prior to the redemption, approximately $ 447 million aggregate principal amount was outstanding.

In June 2021, KHFC issued a notice of redemption of all of its 3.950 % senior notes due July 2025, effective July 14, 2021 (the “Q3 2021 Debt Redemption” and, together with the Q2 2021 Debt Redemption, the “2021 Debt Redemptions”).

Prior to the Q3 2021 Redemption, approximately $ 797 million aggregate principal amount was outstanding.

In connection with the 2021 Debt Redemptions, we recognized a loss on extinguishment of debt of $ 129 million within interest expense on the consolidated statement of income for the year ended December 25, 2021.

These losses primarily reflect the payment of premiums and fees associated with the redemptions as well as the write-off of unamortized debt issuance costs.

Related to the 2021 Debt Redemptions, we recognized debt prepayment and extinguishment costs of $ 126 million on the consolidated statement of cash flows for the year ended December 25, 2021, which reflect the $ 129 million loss on extinguishment of debt adjusted for the non-cash write-off of unamortized debt issuance costs of $ 3 million.

Debt Issuances:

2024 Debt Issuances

In the first quarter of 2024, KHFC issued 550 million euro aggregate principal amount of 3.500 % senior notes due March 2029 (the “2024 Notes”).

The 2024 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, and interest on a senior unsecured basis.

We used the net proceeds from the 2024 Notes for general corporate purposes, including to fund the repayment of our 550 million euro senior notes that matured in May 2024.

2023 Debt Issuances

In May 2023, KHFC issued 600 million euro aggregate principal amount of floating rate senior notes due May 2025 (the “2023 Notes”).

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We incurred an insignificant amount of debt issuance costs in 2024, 2023, and 2022.

We did not incur any debt issuance costs in 2021.

Unamortized debt issuance costs were $ 75 million at December 28, 2024 and $ 81 million at December 30, 2023.

Amortization of debt issuance costs was $ 11 million in 2023 and 2022, and $ 12 million in 2021.

Amortization of debt issuance costs was $ 12 million in 2024 and $ 11 million in 2023 and 2022.

Debt Premium:

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Unamortized debt premium, net, was $ 217 million at December 28, 2024 and $ 234 million at December 30, 2023.

Amortization of our debt premium, net, was $ 16 million in 2023, $ 17 million in 2022, and $ 16 million in 2021.

Amortization of our debt premium, net, was $ 16 million in 2024 and 2023, and $ 17 million in 2022.

Debt Repayments:

In May 2024, we repaid 550 million euro aggregate principal amount of senior notes that matured in the period.

In June 2023, we repaid 750 million euro aggregate principal amount of senior notes that matured in the period.

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In August 2022, we repaid $ 315 million aggregate principal amount of floating rate senior notes that matured in the period.

In February 2021, we repaid $ 111 million aggregate principal amount of floating rate senior notes that matured in the period.

In September 2021, we repaid $ 34 million aggregate principal amount of senior notes that matured in the period.

Fair Value of Debt:

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therefore, it is excluded from our future minimum lease payments and is not a component of our ROU assets or lease liabilities.

We had no losses/(gains) on sale and leaseback transactions in 2023.

Losses/(gains) on sales and leaseback transactions, net, were insignificant for 2022 and 2021.

We had no losses/(gains) on sale and leaseback transactions in 2024 and 2023.

Losses/(gains) on sales and leaseback transactions, net, were insignificant for 2022.

Supplemental balance sheet information related to our leases was (in millions, except lease term and discount rate):

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Synthetic Lease Arrangements:

In June 2023, we entered into a non-cancellable synthetic lease for a distribution facility, for which we are the construction agent, with an estimated construction cost of approximately $ 400 million.

The lease will commence upon completion of construction of the facility which is expected to be in the later part of 2025.

In June 2023, we entered into a non-cancellable synthetic lease for a distribution facility, for which we are the construction agent, that we now anticipate the estimated construction cost to be approximately $ 625 million.

The lease will commence upon completion of construction of the facility which is now expected to be in the later part of 2027.

The term of the lease is five years after commencement.

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Balance at December 28, 2024

1,254 ( 59 ) 1,195

Share Repurchase Program

21 unchanged sentences

Segment Reporting

As of December 30, 2023, we manage and report our operating results through two reportable segments defined by geographic region:

North America and International.

During the fourth quarter of 2023, certain organizational changes were announced that are expected to impact our future internal reporting and reportable segments.

As a result of these changes, we expect to have two reportable segments:

In the first quarter of 2024, our internal reporting and reportable segments changed.

We divided our International segment into three operating segments — EPDM, WEEM, and AEM — to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

Subsequently, we manage our operating results through four operating segments.

We have two reportable segments defined by geographic region:

North America and International Developed Markets.

We anticipate that our remaining operating segments, consisting of WEEM and AEM, will be combined and disclosed as Emerging Markets.

We expect that the change to our reportable segments will be effective in the first quarter of 2024.

Management evaluates segment performance based on several factors, including net sales and Segment Adjusted EBITDA.

Segment Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities);

in addition to these adjustments, we exclude, when they occur, the impacts of divestiture-related license income, restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized;

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities).

Segment Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Management also uses Segment Adjusted EBITDA to allocate resources.

Management does not use assets by segment to evaluate performance or allocate resources.

Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

We have reflected this segment change in all historical periods presented.

As part of the segment reorganization, management reallocated certain corporate expenses previously reported within our International segment to general corporate expenses.

This reflects management’s approach to centrally manage these expenses.

We have reflected this reallocation in all historical periods presented.

Our chief operating decision maker (“CODM”), Carlos Abrams-Rivera, Chief Executive Officer, evaluates segment performance based on several factors, including net sales and Segment Adjusted Operating Income.

In the first quarter of 2024, following changes to our segments, our CODM reevaluated and changed the primary measure utilized to evaluate segment profitability from Segment Adjusted EBITDA to Segment Adjusted Operating Income.

We have reflected this change from Segment Adjusted EBITDA to Segment Adjusted Operating Income in all historical periods presented.

Segment Adjusted Operating Income is defined as operating income/(loss) excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized;

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters.

Segment Adjusted Operating Income is a financial measure that assists our CODM in comparing our performance on a consistent basis by removing the impact of certain items that our CODM believes do not directly reflect our underlying operations.

Our CODM also considers monthly budget-to-actual variances and year-over-year performance of Segment Adjusted Operating Income when making decisions about allocating resources to our segments.

Our CODM does not use assets by segment to evaluate performance or allocate resources.

Therefore, we do not disclose assets by segment.

Emerging Markets represents the aggregation of our WEEM and AEM operating segments.

Adjusted Operating Income for WEEM and AEM is the measure reported to our chief operating decision maker for purposes of making decisions about allocating resources to these operating segments and assessing their performance.

Net sales by segment were (in millions):

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North America $ 19,543 $ 20,126 $ 20,340

International 6,514 6,145 5,691

International Developed Markets

3,535 3,623 3,401

Total segment net sales

23,078 23,749 23,741

Emerging Markets

2,768 2,891 2,744

Total net sales $ 25,846 $ 26,640 $ 26,485

Segment Adjusted EBITDA was (in millions):

December 30, 2023 December 31, 2022 December 25, 2021

Segment Adjusted EBITDA:

Segment Adjusted Operating Income was (in millions):

December 28, 2024

North America

International 1,094 1,017 1,066

International Developed Markets

Net Sales $ 19,543 $ 3,535

Adjusted Cost of Products Sold (a)

Other segment items (b)

Segment Adjusted Operating Income $ 5,111 $ 537 $ 5,648

Emerging Markets

General corporate expenses ( 609 )

Depreciation and amortization (excluding restructuring activities) ( 923 ) ( 922 ) ( 910 )

Divestiture-related license income 54 56 4

Restructuring activities ( 27 )

Unrealized gains/(losses) on commodity hedges 19

Impairment losses ( 3,669 )

Operating income/(loss) 1,683

Interest expense 912

Other expense/(income) ( 85 )

Income/(loss) before income taxes $ 856

(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized;

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters.

(b) Other segment items for North America and International Developed Markets includes SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.

December 30, 2023

North America

International Developed Markets

Net Sales $ 20,126 $ 3,623

Adjusted Cost of Products Sold (a)

Other segment items (b)

Segment Adjusted Operating Income $ 5,050 $ 522 $ 5,572

Emerging Markets 376

General corporate expenses ( 651 )

Restructuring activities ( 60 )

Unrealized gains/(losses) on commodity hedges ( 1 )

Impairment losses ( 662 )

Certain non-ordinary course legal and regulatory matters ( 2 )

Operating income/(loss) 4,572

Interest expense 912

Other expense/(income) 27

Income/(loss) before income taxes $ 3,633

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters.

December 31, 2022

North America

International Developed Markets

Net Sales $ 20,340 $ 3,401

Adjusted Cost of Products Sold (a)

Other segment items (b)

Segment Adjusted Operating Income $ 4,735 $ 522 $ 5,257

Emerging Markets

General corporate expenses ( 587 )

Restructuring activities ( 74 )

Deal costs ( 9 )

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Certain non-ordinary course legal and regulatory matters ( 210 )

Equity award compensation expense ( 141 ) ( 148 ) ( 197 )

Operating income/(loss) 3,634

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Income/(loss) before income taxes $ 2,966

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters.

Total depreciation and amortization expense by segment was (in millions):

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North America $ 614 $ 561 $ 579

International 318 259 234

International Developed Markets

Total segment depreciation and amortization expense

Emerging Markets

General corporate expenses 72 86 96

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North America $ 643 $ 604 $ 513

International 343 331 348

International Developed Markets

Total segment capital expenditures

Emerging Markets

General corporate expenses 112 68 77

Total capital expenditures $ 1,024 $ 1,013 $ 916

In the first quarter of 2024, we changed the way we manage our product portfolio to align with our future growth strategy.

As of December 28, 2024, we manage our product portfolio through eight consumer-driven product platforms:

Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee, and Meats.

A platform is a lens created for the portfolio based on a grouping of consumer needs.

The platforms help us to manage and organize our business effectively by providing insight into our various product categories and brands.

Taste Elevation includes condiments, sauces, dressings, and spreads.

Easy Ready Meals includes Kraft Mac & Cheese varieties, frozen potato products, and other frozen meals.

Substantial Snacking includes Lunchables meal kits, frozen snacks, and pickles.

Desserts includes dry packaged desserts, refrigerated ready to eat desserts, and other dessert toppings.

Hydration includes ready to drink beverages, powdered beverages, and liquid concentrates.

Cheese includes American sliced and recipe cheeses.

Coffee includes mainstream coffee, coffee pods, and premium coffee.

Meats includes cold cuts, bacon, and hot dogs.

Each platform is assigned a role within our business to help inform our resource allocation and investment decisions, which are made at the operating segment level.

These roles include:

Accelerate, Protect, and Balance.

Our Accelerate role contains platforms that are expected to have long-term high growth potential, generate higher gross margins, and are in markets in which we have higher market share.

Our Protect role contains platforms that are expected to have moderate growth potential, tend to generate higher gross margins, and are in markets in which we have higher market share.

Our Balance role contains platforms that include commodity-heavy categories with relatively flat growth potential but help us to maintain our brand footprint.

We have reflected this change to our platforms in all historical periods presented.

Net sales by platform were (in millions):

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Taste Elevation $ 11,371 $ 11,573 $ 10,843

Fast Fresh Meals 5,794 6,064 6,665

Easy Meals Made Better 5,291 5,313 4,927

Real Food Snacking 1,247 1,375 1,808

Flavorful Hydration 1,950 1,999 1,777

Easy Indulgent Desserts 1,072 1,067 1,034

Other 2,291 2,418 2,564

Total net sales $ 26,640 $ 26,485 $ 26,042

Net sales by product category were (in millions):

December 30, 2023 December 31, 2022 December 25, 2021

Condiments and sauces $ 8,934 $ 8,241 $ 7,302

Cheese and dairy 3,857 3,976 4,922

Ambient foods 3,014 3,047 2,896

Frozen and chilled foods 2,910 2,922 2,698

Meats and seafood 2,456 2,733 2,613

Refreshment beverages 1,943 1,999 1,786

Easy Ready Meals 4,748 4,908 4,971

Substantial Snacking 1,230 1,382 1,514

Total Accelerate $ 17,349 $ 17,863 $ 17,328

Desserts $ 1,152 $ 1,153 $ 1,132

Hydration 2,129 2,242 2,354

Total Protect $ 3,281 $ 3,395 $ 3,486

Cheese $ 1,746 $ 1,786 $ 1,915

Coffee 835 891 891

Infant and nutrition 360 411 441

Desserts, toppings and baking 1,209 1,195 1,157

Nuts and salted snacks — — 464

Meats 2,136 2,197 2,395

Other 499 508 470

Total Balance $ 5,216 $ 5,382 $ 5,671

Total net sales $ 25,846 $ 26,640 $ 26,485

Concentration of Risk:

Our largest customer, Walmart Inc., represented approximately 21 % of our net sales in 2023 and 2022, and approximately 22 % of our net sales in 2021.

Both of our segments have sales to Walmart Inc.

Our largest customer, Walmart Inc., represented approximately 21 % of our net sales in 2024, 2023, and 2022.

Both of our reportable segments have sales to Walmart Inc.

Geographic Financial Information:

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Long-lived assets are comprised of property, plant and equipment, net of related accumulated depreciation;

operating lease right-of-use assets, net of related accumulated depreciation;

and the non-current portion of deferred implementation costs for hosted cloud computing service arrangements.

Our long-lived assets by geography were (in millions):

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Total long-lived assets $ 7,796 $ 7,826

At December 30, 2023 and December 31, 2022, long-lived assets by geography excluded amounts classified as held for sale.

At December 30, 2023, long-lived assets by geography excluded amounts classified as held for sale.

Other Financial Data

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( 130 ) 67 ( 135 )

Loss/(gain) on sale of business (b)

Loss/(gain) on sale of business

81 ( 4 ) ( 25 )

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(a) Excludes amortization of prior service costs/(credits).

(b) Includes a gain on the remeasurement of a disposal group that was reclassified as held and used in the third quarter of 2021.

We present all non-service cost components of net pension cost/(benefit) and net postretirement cost/(benefit) within other expense/(income) on our consolidated statements of income.

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See Note 12, Financial Instruments , for information related to our derivative impacts.

Other expense/(income) was $ 85 million of income in 2024 compared to $ 27 million of expense in 2023.

This change was primarily driven by a $ 130 million net pension and postretirement non-service benefit in 2024 compared to a $ 67 million net pension and postretirement non-service cost in 2023, a $ 21 million net foreign exchange gain in 2024 compared to a $ 73 million net foreign exchange loss in 2023, and $ 69 million in interest income in 2024 compared to $ 40 million in interest income in 2023.

These impacts were partially offset by a $ 45 million net loss on derivative activities in 2024 compared to a $ 59 million net gain on derivative activities in 2023, a $ 81 million net loss on the sale of businesses in 2024 compared to a $ 4 million net gain on the sale of business in 2023, and a $ 19 million expense in other miscellaneous expenses in 2024 compared to a $ 4 million expense in other miscellaneous expenses in 2023.

Other expense/(income) was $ 27 million of expense in 2023 compared to $ 253 million of income in 2022.

1 unchanged sentence

These impacts were partially offset by a $ 59 million net gain on derivative activities in 2023 compared to a $ 50 million net loss on derivative activities in 2022, and a $ 13 million increase in interest income as compared to the prior year period.

Other expense/(income) was $ 253 million of income in 2022 compared to $ 295 million of income in 2021.

This change was primarily driven by a $79 million decrease in net pension and postretirement non-service benefits and a $ 25 million net gain on sales of businesses in 2022 compared to a $ 44 million net gain on sales of businesses in 2021.

These impacts were partially offset by a $ 50 million net loss on derivative activities in 2022 compared to an $ 86 million net loss on derivative activities in 2021 and a $ 12 million increase in interest income as compared to the prior year.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data