10q10k10q10k.net

What changed in Kraft Heinz's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Kraft Heinz's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+360 added−306 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in Kraft Heinz's 2024 10-K

360 paragraphs added · 306 removed · 267 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

47 edited+14 added−13 removed26 unchanged
Biggest changeNet Sales by Platform: Net sales by platform as a percentage of consolidated net sales for the periods presented were: December 30, 2023 December 31, 2022 December 25, 2021 Taste Elevation 34 % 31 % 28 % Fast Fresh Meals 22 % 23 % 25 % Easy Meals Made Better 20 % 20 % 19 % Real Food Snacking 5 % 5 % 7 % Flavorful Hydration 7 % 8 % 7 % Easy Indulgent Desserts 4 % 4 % 4 % Other 8 % 9 % 10 % Net Sales by Product Category: The product categories that contributed 10% or more to consolidated net sales in any of the periods presented were: December 30, 2023 December 31, 2022 December 25, 2021 Condiments and sauces 34 % 31 % 28 % Cheese and dairy 14 % 15 % 19 % Ambient foods 11 % 12 % 11 % Frozen and chilled foods 11 % 11 % 10 % Meats and seafood 9 % 10 % 10 % Seasonality Although crops constituting certain of our raw food ingredients are harvested on a seasonal basis, the majority of our products are produced throughout the year.
Biggest changeNet Sales by Platform: Net sales by platform as a percentage of consolidated net sales for the periods presented were: December 28, 2024 December 30, 2023 December 31, 2022 ACCELERATE Taste Elevation 44 % 44 % 41 % Easy Ready Meals 18 % 18 % 19 % Substantial Snacking 5 % 5 % 6 % PROTECT Desserts 4 % 4 % 4 % Hydration 9 % 9 % 9 % BALANCE Cheese 7 % 7 % 7 % Coffee 3 % 3 % 3 % Meats 8 % 8 % 9 % Other 2 % 2 % 2 % Seasonality Although crops constituting certain of our raw food ingredients are harvested on a seasonal basis, the majority of our products are produced throughout the year.
Raw Materials and Packaging: We manufacture (and contract for the manufacture of) our products from a wide variety of raw materials. We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
Raw Materials and Packaging: We manufacture (and contract for the manufacture of) our products from a wide variety of raw materials. We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, sugar and other sweeteners, soybean and vegetable oils, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Kraft Heinz, that are electronically filed with the SEC. 7
In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Kraft Heinz, that are electronically filed with the SEC.
Improving our market position or introducing new products requires substantial advertising and promotional expenditures. 2 Sales Sales and Customers: Our products are sold through our own sales organizations and through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; and institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies.
Improving our market position or introducing new products requires substantial advertising, promotional, and research and development expenditures. 2 Sales Sales and Customers: Our products are sold through our own sales organizations and through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; and institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies.
Research and Development Our research and development efforts focus on achieving the following four objectives: • product innovations, renovations, and new technologies to meet changing consumer needs, support our environmental and sustainability goals, and drive growth; • world-class and uncompromising food safety, quality, and consistency; • superior, consumer-preferred product and package performance; and • continuous process, product, and supply chain optimization.
Research and Development Our research and development efforts focus on achieving the following four objectives: • product innovations, renovations, and new technologies to meet changing consumer needs, support our environmental and sustainability goals, and drive growth; • world-class and uncompromising food safety, quality, and consistency; • superior, consumer-preferred product and package performance; and • continuous process, product, and supply chain optimization and productivity initiatives.
We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of six consumer-driven product platforms. As global citizens, we’re dedicated to making a sustainable, ethical impact while helping to feed the world in healthy, responsible ways.
We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of eight consumer-driven product platforms. As global citizens, we’re dedicated to making a sustainable, ethical impact while helping to feed the world in healthy, responsible ways.
LiveWell represents our total rewards offerings that are designed to attract and engage highly skilled talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through enhanced interactions in moments that matter in an environment where employees feel productive, trusted, and empowered.
LiveWell represents our total rewards offerings that are designed to attract and engage highly skilled and performance-oriented talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through enhanced interactions in moments that matter in an environment where employees feel productive, trusted, and empowered.
Our learning and development offerings are created to enable employees to live our Value We dare to do better every day and own their personal learning and development. We believe this empowers employees to execute with excellence in their current role, accelerate their learning curve, and grow a great career.
Our learning and development offerings are created to enable employees to live our Value We dare to do better every day and own their personal learning and development. We believe this empowers employees to execute with excellence in their current role, accelerate their learning curves, and grow a great career.
Smucker Company, a food and beverage company. Senior Vice President, Sales (2017 to April 2020) at Campbell. Flávio Barros Torres, Executive Vice President and Global Chief Supply Chain Officer 54 Executive Vice President and Global Chief Supply Chain Officer (since December 2021); and Head of Global Operations (January 2020 to December 2021).
Smucker Company, a food and beverage company. Senior Vice President, Sales (2017 to April 2020) at Campbell. Flávio Barros Torres, Executive Vice President and Global Chief Supply Chain Officer 55 Executive Vice President and Global Chief Supply Chain Officer (since December 2021); and Head of Global Operations (January 2020 to December 2021).
Cory Onell, Executive Vice President and Chief Omnichannel Sales and Asian Emerging Markets Officer 50 Executive Vice President and Chief Omnichannel Sales and Asian Emerging Markets Officer (since December 2023) and Chief Sales Officer, U.S. (August 2020 to December 2023). Senior Vice President and Head of U.S. Retail Sales (April to July 2020) at The J. M.
Cory Onell, Executive Vice President and Chief Omnichannel Sales and Asian Emerging Markets Officer 51 Executive Vice President and Chief Omnichannel Sales and Asian Emerging Markets Officer (since December 2023) and Chief Sales Officer, U.S. (August 2020 to December 2023). Senior Vice President and Head of U.S. Retail Sales (April to July 2020) at The J. M.
Andre Maciel, Executive Vice President and Global Chief Financial Officer 49 Executive Vice President and Global Chief Financial Officer (since March 2022); Senior Vice President, U.S. Chief Financial Officer, and Head of Digital Transformation (September 2019 to March 2022); Managing Director, Continental Europe (January to August 2019); Chief Financial Officer, U.S. (2017 to January 2019); and Head of U.S.
Andre Maciel, Executive Vice President and Global Chief Financial Officer 50 Executive Vice President and Global Chief Financial Officer (since March 2022); Senior Vice President, U.S. Chief Financial Officer, and Head of Digital Transformation (September 2019 to March 2022); Managing Director, Continental Europe (January to August 2019); Chief Financial Officer, U.S. (2017 to January 2019); and Head of U.S.
Global Operations Vice President (2017 to 2019) at AB InBev. Melissa Werneck, Executive Vice President and Global Chief People Officer 51 Executive Vice President and Global Chief People Officer (since December 2021); Global Chief People Officer (2016 to December 2021); and Head of Global Human Resources, Performance and Information Technology (2015 to 2016).
Global Operations Vice President (2017 to 2019) at AB InBev. Melissa Werneck, Executive Vice President and Global Chief People Officer 52 Executive Vice President and Global Chief People Officer (since December 2021); Global Chief People Officer (2016 to December 2021); and Head of Global Human Resources, Performance and Information Technology (2015 to 2016).
Commercial Finance (2015 to 2017). Diana Frost, Global Chief Growth Officer 41 Global Chief Growth Officer (since December 2023); Chief Growth Officer, North America (August to December 2023); Head of North America Disruption and Canada Chief Marketing Officer (January to August 2022); and Chief Growth Officer, Canada (September 2020 to December 2021).
Commercial Finance (2015 to 2017). Diana Frost, Global Chief Growth Officer 42 Global Chief Growth Officer (since December 2023); Chief Growth Officer, North America (August to December 2023); Head of North America Disruption and Canada Chief Marketing Officer (January to August 2022); and Chief Growth Officer, Canada (September 2020 to December 2021).
Marcos Eloi Lima, Executive Vice President and Global Chief Procurement and Sustainability Officer 46 Executive Vice President and Global Chief Procurement and Sustainability Officer (since December 2023); Executive Vice President and Global Chief Procurement Officer (December 2021 to December 2023); Chief Procurement Officer (October 2019 to December 2023); and Advisor in the area of procurement (July to October 2019).
Marcos Eloi Lima, Executive Vice President and Global Chief Procurement and Sustainability Officer 47 Executive Vice President and Global Chief Procurement and Sustainability Officer (since December 2023); Executive Vice President and Global Chief Procurement Officer (December 2021 to December 2023); Chief Procurement Officer (October 2019 to December 2023); and Advisor in the area of procurement (July to October 2019).
Pedro Navio, Executive Vice President and President, North America 43 Executive Vice President and President, North America (since December 2023); President – Taste, Meals, and Away From Home (March 2022 to December 2023); President, Latin America (November 2019 to February 2022); and President, Brazil (2017 to November 2019).
Pedro Navio, Executive Vice President and President, North America 44 Executive Vice President and President, North America (since December 2023); President – Taste, Meals, and Away From Home (March 2022 to December 2023); President, Latin America (November 2019 to February 2022); and President, Brazil (2017 to November 2019).
Item 1. Business. General We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious . Consumers are at the center of everything we do. With 2023 net sales of approximately $27 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale.
Item 1. Business. General We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious . Consumers are at the center of everything we do. With 2024 net sales of approximately $26 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale.
We are involved in a number of active proceedings in the United States under CERCLA (and other state actions under similar legislation) related to certain closed, inactive, or divested operations for which we retain liability. As of December 30, 2023, we had accrued an amount we deemed appropriate for environmental remediation.
We are involved in a number of active proceedings in the United States under CERCLA (and other state actions under similar legislation) related to certain closed, inactive, or divested operations for which we retain liability. As of December 28, 2024, we had accrued an amount we deemed appropriate for environmental remediation.
The information on our website, including our ESG Report, is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the Securities and Exchange Commission (“SEC”). 6 Information about our Executive Officers The following are our executive officers as of February 10, 2024: Name and Title Age Business Experience in the Past Five Years Carlos Abrams-Rivera, Chief Executive Officer and Director 56 Chief Executive Officer (since December 2023); President Kraft Heinz (August to December 2023); Executive Vice President and President, North America (December 2021 to August 2023); and U.S.
The information on our website, including our ESG Report, is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the Securities and Exchange Commission (“SEC”). 5 Information about our Executive Officers The following are our executive officers as of February 8, 2025: Name and Title Age Business Experience in the Past Five Years Carlos Abrams-Rivera, Chief Executive Officer and Director 57 Chief Executive Officer (since December 2023); President Kraft Heinz (August to December 2023); Executive Vice President and President, North America (December 2021 to August 2023); and U.S.
To help us evaluate how effective our safety efforts are in lowering incidents rates, we use a Total Recordable Incident Rate (“TRIR”). TRIR is a medical incident rate based on the U.S. Occupational Safety and Health Administration (OSHA) record-keeping criteria (injuries per 200,000 hours). Our TRIR globally was 0.53 in 2023 and 2022.
To help us evaluate how effective our safety efforts are in lowering incidents rates, we use a Total Recordable Incident Rate (“TRIR”). TRIR is a medical incident rate based on the U.S. Occupational Safety and Health Administration (“OSHA”) record-keeping criteria (injuries per 200,000 hours). Our TRIR globally was 0.39 in 2024 and 0.53 in 2023.
We report more detailed information regarding our programs and initiatives related to our people and human capital management in our Environmental Social Governance Report (“ESG Report”). Our 2023 ESG Report, which provides our progress through 2022, is available on our website at www.kraftheinzcompany.com/esg .
We report more detailed information regarding our programs and initiatives related to our people and human capital management in our Environmental Social Governance Report. Our 2024 report, which provides our progress through 2023, is available on our website at www.kraftheinzcompany.com/esg .
Learning and Development: Through Kraft Heinz Ownerversity, we provide learning opportunities for each of our employees, designed to inspire and grow talent within Kraft Heinz while developing employees’ capabilities to help them navigate their career journey.
Learning and Development: Through Ownerversity, our Kraft Heinz learning ecosystem, we provide learning opportunities for each of our employees, designed to inspire and grow talent within Kraft Heinz while developing employees’ skills and competencies to help them navigate their career journey.
Through Ownerversity, employees have access to custom Kraft Heinz training, learning and development materials, and external content libraries and articles. Rewards and Compensation: Our Total Rewards philosophy is to provide a meaningful and flexible spectrum of programs that equitably support our diverse workforce and their families.
Through Ownerversity, employees have access to custom Kraft Heinz training, learning and development materials, and external content libraries and articles. Rewards and Compensation: Our Total Rewards philosophy is to provide a meaningful and flexible spectrum of programs that equitably support our workforce and their families, and compliment Kraft Heinz’ strategy and values.
In 2023, brands used under licenses from third parties included Capri Sun packaged drink pouches for sale in our North America segment. We also grant certain licenses to third parties to use our intellectual property rights in select jurisdictions.
We sell certain products under brands we license from third parties. In 2024, brands used under licenses from third parties included Capri Sun packaged drink pouches for sale in our North America segment. We also grant certain licenses to third parties to use our intellectual property rights in select jurisdictions.
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.
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.
Our 2023 fiscal year was a 52-week period that ended on December 30, 2023, our 2022 fiscal year was a 53-week period that ended on December 31, 2022, and our 2021 fiscal year was a 52-week period that ended on December 25, 2021.
Our 2024 fiscal year was a 52-week period that ended on December 28, 2024, our 2023 fiscal year was a 52-week period that ended on December 30, 2023, and our 2022 fiscal year was a 53-week period that ended on December 31, 2022.
Available Information Our website address is www.kraftheinzcompany.com . The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
The information on our website is not part of this Annual Report on Form 10-K and shall not be deemed to be incorporated by reference into this report or any other filings we make with the SEC.
Competition Our products are sold in highly competitive marketplaces, which continue to experience increased concentration and the growing presence of e-commerce retailers, large-format retailers, and discounters. Our competitors include large national and international food and beverage companies and numerous local and regional companies. We compete with both branded and private label products sold by retailers, wholesalers, and cooperatives.
Competition Our products are sold in highly competitive marketplaces, including e-commerce retailers, large-format retailers, and discounters. Our competitors include large national and international food and beverage companies and numerous local and regional companies. We compete with both branded and private label products sold by retailers, wholesalers, and cooperatives.
In 2021, in our agreements with an affiliate of Groupe Lactalis (“Lactalis”), related to the sale of certain assets in our global cheese business, we each granted the other party various licenses to use certain of our and their respective intellectual property rights in perpetuity, including perpetual licenses for the Kraft and Velveeta brands for certain cheese products.
In our agreements with an affiliate of Groupe Lactalis (“Lactalis”), we granted the other party various licenses to use certain of our and their respective intellectual property rights in perpetuity, including perpetual licenses for the Kraft and Velveeta brands for certain cheese products. We also own numerous patents worldwide.
As of December 30, 2023, Kraft Heinz had approximately 36,000 employees globally. Driven by our Value We champion great people , we support our employees’ health, safety, and professional development and reward outstanding performance at every level. Our rewards strategies (compensation, benefits, recognition, and wellbeing) aim to help our employees help themselves to LiveWell.
Driven by our Value We champion great people , we support our employees’ health, safety, and professional development and reward outstanding and differentiated performance at every level. Our rewards strategies (compensation, benefits, recognition, and wellbeing) aim to help our employees help themselves to LiveWell.
We recognize that a strong company culture is vital to our overall success. Our Purpose, Vision, and Values are the foundation upon which our culture is built. They represent the expectations we have for ourselves and the environment we aspire to create for our Company. Our people are at the heart of who we are at Kraft Heinz.
They represent the expectations we have for ourselves and the environment we aspire to create for our Company. We recognize that our ownership-centric culture is vital to our overall success and a key competitive advantage. Our people are at the heart of who we are at Kraft Heinz.
In 2023, the five largest customers in our North America segment accounted for approximately 46% of North America segment net sales and the five largest customers in our International segment accounted for approximately 14% of International segment net sales.
In 2024, the five largest customers in our North America segment accounted for approximately 46% of North America segment net sales, the five largest customers in our International Developed Markets segment accounted for approximately 28% of International Developed Markets net sales, and the five largest customers in Emerging Markets accounted for approximately 12% of Emerging Markets net sales.
We source these commodities from a variety of providers, including large, international producers and smaller, local, independent sellers. Where appropriate, we seek to establish preferred purchaser status and have developed strategic partnerships with many of our suppliers with the objective of achieving favorable pricing and dependable supply for many of our commodities.
Where appropriate, we seek to establish preferred purchaser status and have developed strategic partnerships with many of our suppliers with the objective of achieving favorable pricing and dependable supply for many of our commodities.
Significant trademarks by segment based on net sales in 2023 were: Majority Owned and Licensed Trademarks North America Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Capri Sun*, Maxwell House, Kool-Aid, Jell-O International Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie’s, Pudliszki, Plasmon *Used under license. We sell certain products under brands we license from third parties.
Significant trademarks by segment based on net sales in 2024 were: Majority Owned and Licensed Trademarks North America Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Capri Sun*, Maxwell House, Kool-Aid, Jell-O International Developed Markets Heinz, Golden Circle, Wattie’s, Plasmon Emerging Markets (a) Heinz, ABC, Master, Quero, Kraft, Pudliszki (a) Emerging Markets represents the aggregation of our WEEM and AEM operating segments. *Used under license.
We also own numerous patents worldwide. We consider our portfolio of patents, patent applications, patent licenses under patents owned by third parties, proprietary trade secrets, technology, know-how processes, and related intellectual property rights to be material to our operations.
We consider our portfolio of patents, patent applications, patent licenses under patents owned by third parties, proprietary trade secrets, technology, know-how processes, and related intellectual property rights to be material to our operations. Patents, issued or applied for, cover inventions ranging from packaging techniques to processes relating to specific products and to the products themselves.
The plans are designed to be market competitive and data-driven to promote our high-performance and results-oriented growth culture and realize our Purpose to Make Life Delicious for employees and their families. 5 Ethics and Transparency: The Kraft Heinz Ethics Helpline is available to our partners, suppliers, customers, and consumers to ask questions or report potential violations of various policies and ethical guidelines, including our Code of Conduct, Supplier Guiding Principles, and Global Human Rights Policy.
Ethics and Transparency: The Kraft Heinz Ethics Helpline is available to our partners, suppliers, customers, and consumers to ask questions or report potential violations of various policies and ethical guidelines, including our Code of Conduct, Supplier Guiding Principles, and Global Human Rights Policy.
The platforms are modular and configurable by reportable segment and market and help us to manage and organize our business effectively by providing insight into our various product categories and brands. Further, each platform is assigned a role within our business to help inform our resource allocation and investment decisions, which are made at the reportable segment level.
Further, 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. The role of a platform may also vary by reportable segment and market.
Although the prices of our principal raw materials can be expected to fluctuate, we believe there will be an adequate supply of the raw materials we use and that they are generally available from numerous sources. We use a range of hedging techniques in an effort to limit the impact of price fluctuations on many of our principal raw materials.
Our procurement teams monitor worldwide supply and cost trends so we can obtain ingredients and packaging needed for production at competitive prices. Although the prices of our principal raw materials can be expected to fluctuate, we believe there will be an adequate supply of the raw materials we use and that they are generally available from numerous sources.
However, we do not fully hedge against changes in commodity prices, and our hedging strategies may not protect us from increases in specific raw material costs. We actively monitor changes to commodity costs so that we can seek to mitigate the effect through pricing and other operational measures.
We actively monitor changes to commodity costs so that we can seek to mitigate the effect through pricing and other operational measures.
In addition, we purchase and use significant quantities of resins, fiberboard, metals, and cardboard to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products.
In addition, we purchase and use significant quantities of plastics, cardboard, resin, glass, and metal to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products. For commodities that we use across many of our product categories we coordinate sourcing requirements and centralize procurement to leverage our scale.
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. As of December 30, 2023, we manage our sales portfolio through six consumer-driven product platforms.
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. In the first quarter of 2024, we changed the way we manage our product portfolio to align with our future growth strategy.
We drive growth through accountability, development opportunities, career ownership, and autonomy and recognize and reward outstanding performance at every level, creating a true spirit of meritocracy. We strive to channel our employees’ passion, curiosity, and attitude to make an impact on our future and our legacy by leading as learners, acting as owners, and being change agents.
We drive growth through high accountability, development and career opportunities, empowerment, and autonomy. We recognize and reward outstanding and differentiated performance at every level, creating a true spirit of ownership, ambition, and meritocracy.
A platform is a lens created for the portfolio based on a grouping of real consumer needs and includes the following for Kraft Heinz: Taste Elevation, Fast Fresh Meals, Easy Meals Made Better, Real Food Snacking, Flavorful Hydration, and Easy Indulgent Desserts.
As of December 28, 2024, we manage our sales portfolio through eight consumer-driven product platforms. A platform is a lens created for the portfolio based on a grouping of consumer needs and includes the following for Kraft Heinz: Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee and Meats. Taste Elevation includes condiments, sauces, dressings, and spreads.
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.
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. Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.
Total Rewards includes compensation elements of salary and wages and incentives, healthcare, savings and insurance plans, wellbeing plans, employee recognition programs, and other voluntary elected benefits. We aim for global consistency while respecting local market practices and employee preferences.
Total Rewards includes compensation elements of base pay and wages and incentives, healthcare, savings and insurance plans, wellbeing plans, employee recognition programs, and other voluntary elected benefits. Kraft Heinz is a great place for those who dare to win in a challenging, meritocratic, ambitious, and engaging environment.
For commodities that we use across many of our product categories, such as corrugated paper and energy, we coordinate sourcing requirements and centralize procurement to leverage our scale. In addition, some of our product lines and brands separately source raw materials that are specific to their operations.
In addition, some of our product lines and brands separately source raw materials that are specific to their operations. We source these commodities from a variety of providers, ranging from large, international producers to smaller, local, independent sellers.
Our Board of Directors (“Board”), through the Human Capital and Compensation Committee, oversees our human resources strategy, key policies, and our 2025 diversity, inclusion, and belonging aspirations. Engagement and Inclusion: We are committed to attracting, developing, and retaining diverse, world-class talent and creating an engaging and inclusive culture that embodies our Purpose, Vision, and Values.
Engagement: We are committed to attracting, developing, and retaining world-class talent and creating an engaging and inclusive culture that embodies our Purpose, Dream, Values, and Leadership Principles. As of December 28, 2024, Kraft Heinz had approximately 36,000 employees globally.
The results and comments are reviewed by the Board, senior leadership, managers, and human resources to help determine where changes are needed to support our people and teams. 4 Diversity, inclusion, and belonging are key drivers for engagement. For us, it also means having our diverse consumer base represented in our workforce and included in relevant business decisions.
The results and comments are reviewed by the Board, senior leadership, managers, and human resources to help determine where changes are needed to support our people and teams. 4 Our November 2024 survey showed that we hit an all-time high for employee engagement since the 2015 Merger and achieved our aspiration to rank in the top-quartile on the Inclusion Index, which measures employees feeling like their opinions count, belonging and inclusive leadership.
Removed
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.
Added
In 2024, we experienced moderate inflation in our supply chain costs compared to the prior year period, which we expect to continue through 2025. While inflationary pressures within procurement, manufacturing, and logistics costs had a negative impact on our results of operations, we experienced increased stability of these costs as compared to the prior year period.
Removed
Patents, issued or applied for, cover inventions ranging from packaging techniques to processes relating to specific products and to the products themselves.
Added
We use a range of hedging techniques in an effort to limit the impact of price fluctuations on many of our principal raw materials. However, we do not fully hedge against changes in commodity prices, and our hedging strategies may not protect us from increases in specific raw material costs.
Removed
In 2023, we continued to experience higher commodity costs and supply chain costs, including manufacturing, procurement, and logistics costs largely due to inflationary pressures concentrated in the first half of the year. Our procurement teams monitor worldwide supply and cost trends so we can obtain ingredients and packaging needed for production at competitive prices.
Added
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.
Removed
These roles include: Grow, Energize, and Stabilize. The role of a platform may also vary by reportable segment and market. We are currently evaluating our existing platforms and roles and anticipate changes to align with our future growth strategy.
Added
Coffee includes mainstream coffee, coffee pods, and premium coffee. Meats includes cold cuts, bacon, and hot dogs. The platforms are modular and configurable by reportable segment and market and help us to manage and organize our business effectively by providing insight into our various product categories and brands.
Removed
Human Capital Management We are driven by our Purpose, our Vision— To sustainably grow by delighting more consumers globally , and our Values— We are consumer obsessed , We dare to do better every day , We champion great people , We demand diversity , We do the right thing , and We own it .
Added
Human Capital Management We are driven by our Purpose– Let’s make life delicious , our Company Dream— To be the leader in elevating and creating food that makes you feel good, and our Values and Leadership Principles. Those elements represent the foundation upon which our culture is built.
Removed
We live our Value of We demand diversity by focusing on three strategic areas: hiring and growing talent from diverse backgrounds and perspectives, developing inclusive leaders, and tracking and reporting our progress. Our Business Resource Groups (BRGs) are employee-led, multi-functional groups based upon shared common interests.
Added
We strive to channel our employees’ passion, curiosity, and attitude to make an impact on our future and our legacy by leading as learners, acting as owners, and being change agents. Our Board of Directors (“Board”), through the Human Capital and Compensation Committee, oversees our human resources strategy and key policies.
Removed
They help foster an engaged and inclusive environment where all talent grows and thrives, create a network of support for employees, and serve as a resource for the organization on topics related to their focus area. Our Global Inclusion Council has been established to create strategic accountability for results.
Added
We believe our culture is the secret sauce that sets us apart and drives our success. It is the key ingredient that unites us as a Community of Owners, fosters a sense of belonging, and inspires us to lead the future of food. It is the foundation of our employee value proposition. We grow our people to grow our business.
Removed
It also provides governance and oversight of reporting on diversity efforts and initiatives. The Council is comprised of executive leaders and members of the Board. We have 2025 diversity, equity, inclusion, and belonging (“DEI&B”) aspirations that have shaped some of our guiding principles.
Added
Our Employee Value Proposition is built on three core pillars: • We develop people for greatness, unlocking their full potential through continuous learning and growth opportunities. • We nurture an ownership-centric culture, encouraging people to act with autonomy and treat our business as their own. • We drive impact by challenging the status quo, celebrating differences, and sparking innovation in pursuit of leading the future of food.
Removed
Our long-term ambition is to have demographic parity in the countries in which we operate and to be recognized as a top quartile company in inclusion. Our aspirations include that 50% of our global management positions be filled by women and 30% of our salaried U.S. employee population identify as people of color.
Added
Over the past decade, we have been on a journey to create a workplace that resembles the consumers that we serve and provide delicious innovations that better serve our people, business, and communities. We have made significant progress, learned a lot, and plan to build on our successes as we set the table for the future.
Removed
Our DEI&B efforts have continued to be expanded as part of our multi-year strategy. Each day, we are working to create a healthier, more equitable global workplace and world.
Added
We believe in ownership and meritocracy, recognizing and rewarding our people on their achievements and impact as they grow their careers with us. We aim for global consistency while respecting local market practices and employee preferences.
Removed
As of December 30, 2023: • 43% of employees in global management positions identified as women; • 29% of salaried employees in the U.S. identified as people of color; • 33% of our Executive Leadership Team identified as women; and • 78% of our Executive Leadership Team identified as people of color.
Added
The plans are designed to be market competitive and data-driven to promote our high-performance and results-oriented growth culture and realize our Purpose to Make Life Delicious for employees and their families.
Removed
As we progress on our 2025 aspirations, we are focused on: • Hiring, Investing in, and Growing Talent from Diverse Backgrounds and Perspectives through expanded recruiting partnerships with Historically Black Colleges and Universities, diverse professional organizations, and training in our hiring process to reduce bias and promote equal employment opportunities. • Developing Inclusive Leaders through an interactive learning experience for managers on interrupting bias in our Organizational People Review process and their role in creating an inclusive environment. • Tracking and Reporting Our Progress year over year through oversight by the Kraft Heinz Global Inclusion Council.
Added
Angel Willis Executive Vice President, Global General Counsel and Corporate Affairs Officer 54 Executive Vice President, Global General Counsel and Corporate Affairs Officer (since November 2024); and Vice President, General Counsel and Secretary (January 2019 to November 2024) at Sealed Air Corporation, a global provider of packaging solutions. 6 Available Information Our website address is www.kraftheinzcompany.com .
Removed
Rashida La Lande, Executive Vice President and Chief Legal and Corporate Affairs Officer 50 Executive Vice President and Chief Legal and Corporate Affairs Officer (since December 2023); Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer (December 2021 to December 2023); Corporate Secretary (2018 to May 2022); Senior Vice President, Global General Counsel and Head of ESG (formerly CSR) and Government Affairs (2018 to December 2021); and Senior Vice President and Global General Counsel (2018).
Added
We use our investor relations website, ir.kraftheinzcompany.com, as a routine channel for distribution of important, and often material, information about Kraft Heinz, including quarterly and annual earnings results and presentations, press releases and other announcements, webcasts, analyst presentations, investor days, sustainability initiatives, financial information, and corporate governance practices, as well as archives of past presentations and events.
Added
We encourage you to follow our investor relations website in addition to our filings with the SEC to receive timely information about the Company.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+10 added−7 removed176 unchanged
Biggest changeFailure to effectively assess, timely change, and properly set pricing, promotions, or trade incentives may negatively impact our ability to achieve our objectives. In addition, in order to remain competitive, we rely on our ability to secure new retailers and maintain or add shelf space for our products.
Biggest changeFurthermore, our competitors may attempt to gain market share by offering products at prices at or below those typically offered by our company, which may require us to increase spending on advertising and promotions and/or reduce prices. Failure to effectively assess, timely change, and properly set pricing, promotions, or trade incentives may negatively impact our ability to achieve our objectives.
Increased natural disasters and decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of natural resources and commodities, including dairy products, meat products, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products, and could further decrease food security for communities around the world.
Increased natural disasters and decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of natural resources and commodities, including dairy products, meat products, tomato products, sugar and other sweeteners, soybean and vegetable oils, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products, and could further decrease food security for communities around the world.
We hold assets, incur liabilities, earn revenue, and pay expenses in a variety of currencies other than the U.S. dollar, primarily the Canadian dollar, euro, British pound sterling, Brazilian real, Australian dollar, Chinese renminbi, Indonesian rupiah, New Zealand dollar, and Russian ruble.
We hold assets, incur liabilities, earn revenue, and pay expenses in a variety of currencies other than the U.S. dollar, primarily the Canadian dollar, euro, British pound sterling, Australian dollar, Brazilian real, Chinese renminbi, Indonesian rupiah, New Zealand dollar, and Russian ruble.
We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, sugar and other sweeteners, soybean and vegetable oils, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
Our existing debt, together with any incurrence of additional indebtedness, could have important consequences, including, but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to obtain additional financing for working capital, capital expenditures, research and development, debt service requirements, acquisitions, and general corporate or other purposes; 14 • resulting in a downgrade to our credit rating, which could adversely affect our cost of funds, including our commercial paper programs, liquidity, and access to capital markets; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors who are not as highly leveraged; • making it more difficult for us to make payments on our existing indebtedness; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, payments of dividends, capital expenditures, and future business opportunities; • exposing us to risks related to fluctuations in foreign currency, as we earn profits in a variety of foreign currencies and the majority of our debt is denominated in U.S. dollars; and • in the case of any additional indebtedness, exacerbating the risks associated with our substantial financial leverage.
Our existing debt, together with any incurrence of additional indebtedness, could have important consequences, including, but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to obtain additional financing for working capital, capital expenditures, research and development, debt service requirements, acquisitions, and general corporate or other purposes; • resulting in a downgrade to our credit rating, which could adversely affect our cost of funds, including our commercial paper programs, liquidity, and access to capital markets; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors who are not as highly leveraged; • making it more difficult for us to make payments on our existing indebtedness; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, payments of dividends, capital expenditures, and future business opportunities; • exposing us to risks related to fluctuations in foreign currency, as we earn profits in a variety of foreign currencies and the majority of our debt is denominated in U.S. dollars; and • in the case of any additional indebtedness, exacerbating the risks associated with our substantial financial leverage.
A change in consumer preferences could also cause us to increase capital, marketing, and other expenditures, which could materially and adversely affect our product sales, financial condition, and operating results. We may be unable to drive revenue growth in our key product categories or platforms, increase our market share, or add products that are in faster-growing and more profitable categories.
A change in consumer preferences could also cause us to increase capital, marketing, and other expenditures, which could materially and adversely affect our product sales, financial condition, and operating results. 9 We may be unable to drive revenue growth in our key product categories or platforms, increase our market share, or add products that are in faster-growing and more profitable categories.
If we are unable to compete effectively, our profitability, financial condition, and operating results may decline. Our success depends on our ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation. Consumer preferences for food and beverage products change continually and rapidly.
If we are unable to compete effectively, our profitability, financial condition, and operating results may decline. 7 Our success depends on our ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation. Consumer preferences for food and beverage products change continually and rapidly.
If we are unable to adjust to developments in these changing landscapes, we may be disadvantaged in key channels and with certain consumers, which could materially and adversely affect our product sales, financial condition, and operating results. Changes in our relationships with significant customers or suppliers, or in other business relationships, could adversely impact us.
If we are unable to adjust to 8 developments in these changing landscapes, we may be disadvantaged in key channels and with certain consumers, which could materially and adversely affect our product sales, financial condition, and operating results. Changes in our relationships with significant customers or suppliers, or in other business relationships, could adversely impact us.
The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations. 11 Finally, we might fail to effectively address increased attention from the media, stockholders, activists, and other stakeholders on climate change and related environmental sustainability matters.
The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations. Finally, we might fail to effectively address increased attention from the media, stockholders, activists, and other stakeholders on climate change and related environmental sustainability matters.
In the past, we have experienced security incidents resulting from unauthorized access to or use of our systems 20 or those of third parties, which to date, have not had a material impact on our operations; however, there is no assurance that the impact of any security incidents will not be material in the future.
In the past, we have experienced security incidents resulting from unauthorized access to or use of our systems or those of third parties, which to date, have not had a material impact on our operations; however, there is no assurance that the impact of any security incidents will not be material in the future.
We use commodity futures, options, and swaps to economically hedge the price of certain input costs, including dairy products, vegetable oils, corn, coffee beans, wheat products, meat products, sugar cane, and cocoa beans. We recognize gains and losses based on changes in the values of these commodity derivatives.
We use commodity futures, options, and swaps to economically hedge the price of certain input costs, including dairy products, vegetable oils, coffee beans, corn, wheat products, sugar cane and meat products. We recognize gains and losses based on changes in the values of these commodity derivatives.
Federal, state, and local governments and administrative bodies within the United States, which represents the majority of our operations, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us.
Federal, state, and local governments and administrative bodies within the United States, which represents the 20 majority of our operations, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us.
These factors include, but are not limited to: • natural disasters, labor strikes, or other disruptions at any of our facilities or our suppliers’ or distributors’ facilities may impair or delay the delivery of our products; and • illness of our workforce, or the workforce of third parties with which we do business, due to influenza or pandemics, could disrupt production of our products in one or more of our manufacturing facilities, or cause our suppliers, vendors, distributors, or third-party manufacturers to fail to meet their obligations to us. 19 These or other disruptions may require additional resources to restore our supply chain or distribution network.
These factors include, but are not limited to: • natural disasters, labor strikes, or other disruptions at any of our facilities or our suppliers’ or distributors’ facilities may impair or delay the delivery of our products; and • illness of our workforce, or the workforce of third parties with which we do business, due to influenza or pandemics, could disrupt production of our products in one or more of our manufacturing facilities, or cause our suppliers, vendors, distributors, or third-party manufacturers to fail to meet their obligations to us. 18 These or other disruptions may require additional resources to restore our supply chain or distribution network.
Even if we make changes to align ourselves with such legal or regulatory requirements, we may still be subject to significant penalties if such laws and regulations are interpreted and applied in a manner inconsistent with our practices.
Even if we make changes to align ourselves with such legal or regulatory 10 requirements, we may still be subject to significant penalties if such laws and regulations are interpreted and applied in a manner inconsistent with our practices.
Any of these factors could materially and adversely affect our financial condition and operating results. We may not be able to successfully execute our strategic initiatives. We plan to continue to conduct strategic initiatives in various markets.
Any of these factors could materially and adversely affect our financial condition and operating results. 11 We may not be able to successfully execute our strategic initiatives. We plan to continue to conduct strategic initiatives in various markets.
The timing and amount of any repurchases, if any, will depend on factors 18 such as our historical and expected business performance and cash and liquidity positions, the price of our stock, economic and market conditions, and corporate and regulatory requirements.
The timing and amount of any repurchases, if any, will depend on factors such as our historical and expected business performance and cash and liquidity positions, the price of our stock, economic and market conditions, and corporate and regulatory requirements.
Various laws and regulations govern our practices including, but not limited to, those related to advertising and marketing, product claims and labeling, food production, environmental matters (including climate change), packaging and waste management (including packaging containing PFAS), intellectual property, consumer protection and product liability, commercial disputes, trade and export controls, anti-trust, data privacy, labor and employment, workplace health and safety, forced labor, such as the UFLPA, and tax.
Various laws and regulations govern our practices including, but not limited to, those related to advertising and marketing, product claims and labeling, food production and nutritional requirements, environmental matters (including climate change), packaging and waste management (including packaging containing PFAS), intellectual property, consumer protection and product liability, commercial disputes, trade and export controls, anti-trust, data privacy, labor and employment, workplace health and safety, forced labor, such as the UFLPA, and tax.
Although we take measures to mitigate the impact of this inflation through pricing actions and efficiency gains, if these measures are not effective our financial condition, operating results, and cash flows could be materially adversely affected.
Although we take measures to mitigate the impact of this inflation through pricing actions and efficiency initiatives, if these measures are not effective our financial condition, operating results, and cash flows could be materially adversely affected.
Approximately 31% of our 2023 net sales were generated outside of the United States. As a result, we are subject to risks inherent in global operations.
Approximately 31% of our 2024 net sales were generated outside of the United States. As a result, we are subject to risks inherent in global operations.
We must also be able to respond successfully to technological advances (including artificial intelligence, machine learning, and augmented reality, which may become critical in interpreting consumer preferences in the future) by and intellectual property rights of our competitors, and failure to do so could compromise our competitive position and impact our product sales, financial condition, and operating results.
We must also be able to respond successfully to technological advances by our competitors (including artificial intelligence, machine learning, and augmented reality, which may become critical in interpreting consumer preferences in the future), and failure to do so could compromise our competitive position and impact our product sales, financial condition, and operating results.
Although we do not have operations in Ukraine, and our business in Russia generated approximately 1% of our consolidated net sales for the year ended December 30, 2023, the military conflict between Russia and Ukraine has caused, and could continue to cause, negative impacts on our business and the global economy.
Although we do not have operations in Ukraine, and our business in Russia generated approximately 1% of our consolidated net sales for the year ended December 28, 2024, the military conflict between Russia and Ukraine has caused, and could continue to cause, negative impacts on our business and the global economy.
While less than 1% of consolidated total assets are located in Russia as of December 30, 2023, our Russian assets may be partially or fully impaired in future periods, or our business operations terminated, based on actions taken by Russia, other parties, or us.
While less than 1% of consolidated total assets are located in Russia as of December 28, 2024, our Russian assets may be partially or fully impaired in future periods, or our business operations terminated, based on actions taken by Russia, other parties, or us.
Our four remaining reporting units had no goodwill carrying amount at the time of the 2023 annual impairment test.
Our four remaining reporting units had no goodwill carrying amount at the time of the 2024 annual impairment test.
Other factors impacting our operations in the United States and in international locations where we do business include changes in laws, export and import restrictions, foreign currency exchange rates, foreign currency devaluation, cash repatriation restrictions, recessionary conditions, governmental subsidies provided to our consumers, foreign ownership restrictions, nationalization, the impact of hyperinflationary environments, a potential U.S. federal government shutdown, terrorist acts, political unrest, and military conflict.
Other factors impacting our operations in the United States and in international locations where we do business include changes in laws, export and import restrictions, foreign currency exchange rates, foreign currency devaluation, cash repatriation restrictions, recessionary conditions, governmental subsidies provided to our consumers such as the Supplemental Nutrition Assistance Program (“SNAP”) in the U.S., foreign ownership restrictions, nationalization, the impact of hyperinflationary environments, a potential U.S. federal government shutdown, terrorist acts, political unrest, and military conflict.
If the carrying amount of a reporting unit or brand exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount, in the case of reporting units, not to exceed the associated carrying amount of goodwill. 15 Reporting units and brands that have 20% or less excess fair value over carrying amount as of the 2023 annual impairment test we performed as of July 2, 2023 have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.
If the carrying amount of a reporting unit or brand exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount, in the case of reporting units, not to exceed the associated carrying amount of goodwill. 14 Reporting units and brands that have 20% or less excess fair value over carrying amount as of the 2024 annual impairment test performed as of June 30, 2024 have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.
Our financial condition and ability to meet the needs of our customers could be materially and adversely affected if strikes or work stoppages or interruptions occur as a result of delayed negotiations with union-represented employees both in and outside of the United States. We continue to observe a competitive labor market.
Our financial condition and ability to meet the needs of our customers could be materially and adversely affected if strikes or work stoppages or interruptions occur as a result of delayed negotiations with union-represented employees both in and outside of the United States.
In addition, we purchase and use significant quantities of resins, fiberboard, metals, and cardboard to package our products, and we use other inputs, such as electricity, natural gas, and water, to operate our facilities. We are also exposed to changes in oil prices, including diesel fuel, which influence both our packaging and transportation costs.
In addition, we purchase and use significant quantities of plastics, cardboard, resin, glass, and metal to package our products, and we use other inputs, such as electricity, natural gas, and water, to operate our facilities. We are also exposed to changes in oil prices, including diesel fuel, which influence both our packaging and transportation costs.
Factors that are hard to predict or beyond our control, such as weather or other geological events or natural disasters, including hurricanes, earthquakes, floods, tsunamis, or wild fires (whether as a result of climate change or otherwise), raw material shortages, fires or explosions, political unrest, geopolitical conflicts (including the ongoing conflicts between Russia and Ukraine and in the Middle East), terrorism, civil strife, acts of war, public corruption, expropriation, generalized labor unrest or labor shortages, or pandemics (including COVID-19), could damage or disrupt our operations or the operations of our customers, suppliers, vendors, co-manufacturers, distributors, or regulators.
Factors that are hard to predict or beyond our control, such as weather or other geological events or natural disasters, including hurricanes, earthquakes, floods, tsunamis, or wild fires (whether as a result of climate change or otherwise), raw material shortages, fires or explosions, political unrest, geopolitical conflicts, terrorism, civil strife, acts of war, public corruption, expropriation, generalized labor unrest or labor shortages, cybersecurity incidents, or pandemics, could damage or disrupt our operations or the operations of our customers, suppliers, vendors, co-manufacturers, distributors, or regulators.
Moreover, weak economic conditions, recessions, inflation, severe or unusual weather events, global or local pandemics, including COVID-19, as well as other factors, could affect consumer preferences and demand, at times, causing a strain on our supply chain due, in part, to retailers, distributors, or carriers modifying their restocking, fulfillment, or shipping practices.
Moreover, weak economic conditions, recessions, inflation, severe or unusual weather events, pandemics, geopolitical conflicts, public boycotts, as well as other factors, could affect consumer preferences and demand, at times, causing a strain on our supply chain due, in part, to retailers, distributors, or carriers modifying their restocking, fulfillment, or shipping practices.
Prices for commodities, energy, and other supplies are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, inflationary pressure, foreign currency fluctuations, geopolitical conditions or conflicts 16 (including the ongoing conflicts between Russia and Ukraine and in the Middle East and rising tensions between China and Taiwan), cybersecurity incidents, severe weather, natural disasters, global climate change, water risk, pandemics, crop failures, crop shortages due to plant disease or insect and other pest infestation, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, including increased demand for biofuels, and agricultural programs.
Prices 15 for commodities, energy, and other supplies are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, inflationary pressure, foreign currency fluctuations, geopolitical conditions or conflicts, cybersecurity incidents, severe weather, natural disasters, global climate change, water risk, pandemics, crop failures, crop shortages due to plant disease or insect and other pest infestation, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, including increased demand for biofuels, and agricultural programs.
Additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets could negatively affect our financial condition and results of operations. As of December 30, 2023, we maintain 11 reporting units, seven of which comprise our goodwill balance. Our indefinite-lived intangible asset balance primarily consists of a number of individual brands .
Additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets could negatively affect our financial condition and results of operations. As of December 28, 2024, 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 .
Our processes and controls for reporting sustainability and other matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting sustainability metrics, including sustainability-related disclosures that may be required by the SEC, European Union, and other foreign, federal, state, and local regulatory and legislative bodies, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Our processes and controls for reporting sustainability and other matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting sustainability metrics, including sustainability-related disclosures that may be required by the SEC, European Union, and other foreign, federal, state, and local regulatory and legislative bodies (including, but not limited to, the European Union’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive and the state of California’s new climate change disclosure requirements), and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
As of December 30, 2023, registrable shares represented approximately 26.7% of all outstanding shares of our common stock. Although the registrable shares are subject to certain holdback and suspension periods, the registrable shares are not subject to a “lock-up” or similar restriction under the registration rights agreement.
As of December 28, 2024, registrable shares represented approximately 27.2% of all outstanding shares of our common stock. Although the registrable shares are subject to certain holdback and suspension periods, the registrable shares are not subject to a “lock-up” or similar restriction under the registration rights agreement.
Our reporting units that have less than 5% excess fair value over carrying amount as of the 2023 annual impairment test are considered at a heightened risk of future impairments and include our TMA, Continental Europe, and CNAC reporting units, which had an aggregate goodwill carrying amount of $15.9 billion.
Our reporting units that have less than 5% excess fair value over carrying amount as of the 2024 annual impairment test are considered at a heightened risk of future impairments and include our TMS, Continental Europe, and AFH reporting units, which had an aggregate goodwill carrying amount of $19.0 billion.
Additionally, the Organization for Economic Co-operation and Development (OECD), a global coalition of member countries, proposed a two-pillar plan to reform international taxation. The proposals aim to ensure a fairer distribution of profits among countries and impose a floor on tax competition through the introduction of a 21 global minimum tax.
Additionally, 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%.
Economic and financial uncertainties in our international markets, changes to major international trade arrangements, and the imposition of tariffs by certain foreign governments could negatively impact our operations and sales.
Economic and financial uncertainties in our international markets, changes to major international trade arrangements, and the imposition of increased or new tariffs by the U.S. federal government or by certain foreign governments could negatively impact our operations and sales.
Although the remaining brands, with a carrying amount of $15.7 billion, have more than 50% excess fair value over carrying amount as of the 2023 annual impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
Although the remaining brands, with a carrying amount of $16.9 billion, have more than 50% excess fair value over carrying amount as of the latest test for each brand, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
Berkshire Hathaway Inc. has the ability to exert influence over us and significant influence over matters requiring stockholder approval. As of December 30, 2023, Berkshire Hathaway Inc. (“ Berkshire Hathaway” ) owns approximately 26.7% of our common stock. Three members of our Board are officers and/or directors of Berkshire Hathaway or its affiliates.
Berkshire Hathaway Inc. has the ability to exert influence over us and significant influence over matters requiring stockholder approval. As of December 28, 2024, Berkshire Hathaway In c. (“ Berkshire Hathaway” ) owns approximately 27.2% of our common stock. Two members of our Board are officers and/or directors of Berkshire Hathaway or its affiliates.
Among other consequences, such an outcome could result in negative publicity that harms our brands and reputation and could result in a delay or our complete inability to import such materials or products, which could result in inventory shortages and greater supply chain compliance costs. 13 Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands.
Among other consequences, such an outcome could result in negative publicity that harms our brands and reputation and could result in a delay or our complete inability to import such materials or products, which could result in inventory shortages and greater supply chain compliance costs.
Even if we obtain preferred product visibility and shelf space, our new and existing products may fail to achieve the sales expectations set by retailers, which may cause these retailers to remove our products from their shelves.
Even if we obtain preferred product visibility and shelf space, our new and existing products may fail to achieve the sales expectations set by retailers, which may cause these retailers to remove our products from their shelves. Our products are sold in highly competitive marketplaces, including e-commerce retailers, large-format retailers, and discounters.
We consider our intellectual property rights, particularly and most notably our trademarks, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be a significant and valuable aspect of our business.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands. We consider our intellectual property rights, particularly and most notably our trademarks, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be a significant and valuable aspect of our business.
The effects of current geopolitical conflicts, including the conflicts between Russia and Ukraine and in the Middle East and rising tensions between China and Taiwan, as well as potential future geopolitical tensions, could heighten many of our known risks described in this Item 1A, Risk Factors .
The effects of current geopolitical conflicts as well as potential future geopolitical tensions, could heighten many of our known risks described in this Item 1A, Risk Factors .
Adverse attention about these types of concerns, whether or not valid, may damage our reputation, discourage consumers from buying our products, or cause production and delivery disruptions that could negatively impact our net sales and financial condition. 10 We may also suffer losses if our products or operations violate applicable laws or regulations or if our products cause injury, illness, or death.
Adverse attention about these types of concerns, whether or not valid, may damage our reputation, discourage consumers from buying our products, or cause production and delivery disruptions that could negatively impact our net sales and financial condition.
Retail consolidation and increasing retailer power could materially and adversely affect our product sales, financial condition, and operating results. Retail consolidation also increases the risk that adverse changes in our customers’ business operations or financial performance may have a corresponding adverse effect on us, which could be material.
Retail consolidation also increases the risk that adverse changes in our customers’ business operations or financial performance may have a corresponding adverse effect on us, which could be material.
Our success depends on our ability to predict, identify, and interpret the tastes and dietary habits of consumers. We must continue to offer products that appeal to consumer preferences, including with respect to health and wellness.
Our success depends on our ability to predict, identify, and interpret the tastes and dietary habits of consumers. We must continue to offer products that appeal to consumers, including with respect to their health and wellness preferences and changing consumption patterns, such as those potentially associated with weight-loss drugs.
Additionally, we may not successfully complete any planned strategic initiatives, including achieving any previously announced productivity efficiencies and financial targets, any new business may not be profitable or meet our 12 expectations, or any divestiture may not be completed without disruption.
We may also face difficulties integrating new business operations with our current sourcing, distribution, information technology systems, and other operations. Additionally, we may not successfully complete any planned strategic initiatives, including achieving any previously announced productivity efficiencies and financial targets, any new business may not be profitable or meet our expectations, or any divestiture may not be completed without disruption.
Changes in immigration laws and policies could also make it more difficult for us to recruit or relocate skilled employees. Any such loss, failure, or limitation could adversely affect our product sales, financial condition, and operating results.
As a result, the lack of positive performance in our stock price may adversely affect our ability to attract or retain key personnel. Changes in immigration laws and policies could also make it more difficult for us to recruit or relocate skilled employees. Any such loss, failure, or limitation could adversely affect our product sales, financial condition, and operating results.
In addition, our marketing could face claims of false or deceptive advertising or other criticism. A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability.
A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability.
If we are unable to secure sufficient and attractive shelf space, adequate product visibility, and attractive pricing for our products with retailers, our products may be disadvantaged against our competitors.
In addition, in order to remain competitive, we rely on our ability to secure new retailers and maintain or add shelf space for our products. If we are unable to secure sufficient and attractive shelf space, adequate product visibility, and attractive pricing for our products with retailers, our products may be disadvantaged against our competitors.
In addition, the financial condition of such customers, suppliers, and other significant contractual counterparties are affected in large part by conditions and events that are beyond our control.
In addition, the financial condition of such customers, suppliers, and other significant contractual counterparties are affected in large part by conditions and events that are beyond our control. Significant deterioration in the financial conditions of significant customers or suppliers, or in other business relationships, could materially and adversely affect our product sales, financial condition, and operating results.
In addition, Berkshire Hathaway is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Berkshire Hathaway may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those opportunities may not be available to us.
In addition, Berkshire Hathaway is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us.
Additionally, forced labor concerns have rapidly become a global area of interest, and have resulted in, and are expected to continue to result in, new regulations in the markets in which we operate.
Any of these factors could materially and adversely affect our product sales, financial condition, and results of operations. 12 Additionally, forced labor concerns have rapidly become a global area of interest, and have resulted in, and are expected to continue to result in, new regulations in the markets in which we operate.
Our Asia reporting unit had between 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $309 million as of the 2023 annual impairment test.
Our Hydration & Desserts (“HD”) and Asia reporting units had between 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $4.6 billion as of the 2024 annual impairment test.
Unplanned turnover, failure to attract and develop personnel with key emerging capabilities such as e-commerce and digital marketing skills, or failure to develop adequate succession plans for leadership positions, including the Chief Executive Officer position, could deplete our institutional knowledge base and erode our competitiveness.
Unplanned turnover, failure to attract and develop personnel with key emerging capabilities or failure to develop adequate succession plans for leadership positions, including the Chief Executive Officer position, could deplete our institutional knowledge base and erode our competitiveness. Further, equity-based compensation is a key component of our compensation program and essential for attracting and retaining qualified personnel.
If we fail to expand our product offerings successfully across product categories or platforms, or if we do not rapidly develop products in faster-growing or more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and operating results. 8 Prolonged negative perceptions concerning the health, environmental, or social implications of certain food and beverage products, ingredients, or packaging materials could influence consumer preferences and acceptance of our products and marketing programs.
If we fail to expand our product offerings successfully across product categories or platforms, or if we do not rapidly develop products in faster-growing or more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and operating results.
In addition, claims about the health impacts of consumption of our products, or ingredients, components, or substances 17 present or allegedly present in those products or packaging, have resulted in, and could in the future result in, us being subject to regulations, fines, lawsuits, or taxes that could adversely impact our business.
In addition, claims about the health impacts of consumption of our products, or ingredients, components, or substances present or allegedly present in those products or packaging, including in connection with the development, manufacture, and marketing of our products, have resulted in, and could in the future result 16 in, us being subject to regulations, fines, lawsuits, or taxes, or may cause us to change the way in which we operate which could adversely impact our profitability, financial condition, or operating results.
Negative perceptions of food and beverage marketing could adversely affect our brand image or lead to stricter regulations and scrutiny of our marketing practices.
We seek to maintain, extend, and expand our brand image through marketing investments, including advertising and consumer promotions, and product innovation. Negative perceptions of food and beverage marketing could adversely affect our brand image or lead to stricter regulations and scrutiny of our marketing practices.
We may not have the current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems over long periods of time.
We may not have the 19 current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems over long periods of time. Additionally, it may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks.
Slow economic growth or high unemployment in the markets in which we operate could constrain consumer spending, and declining consumer purchasing power could adversely impact our profitability. Any of these factors could result in increased costs or decreased sales, and could materially and adversely affect our product sales, financial condition, and results of operations.
Slow economic growth, inflation, or high unemployment in the markets in which we operate could constrain consumer spending, and declining consumer purchasing power could adversely impact our profitability.
Our brands that have less than 5% excess fair value over carrying amount as of the 2023 annual impairment test are considered at a heightened risk of future impairments and include our Kraft , Velveeta , Maxwell House , Cool Whip , and Jet Puffed brands, which had an aggregate carrying amount of $13.5 billion.
Our brands that have less than 5% excess fair value over carrying amount as of the latest test for each brand are considered at a heightened risk of future impairments and include our Oscar Mayer, Lunchables, Claussen, and Wattie’s brands, which had an aggregate carrying amount of $2.6 billion.
Reporting units with 10% or less fair value over carrying amount had an aggregate goodwill carrying amount after impairment of $17.6 billion as of the 2023 annual impairment test and included Taste, Meals, and Away from Home (“TMA”), Northern Europe, Continental Europe, and Canada and North America Coffee (“CNAC”).
Reporting units with 10% or less fair value over carrying amount, including reporting units that were impaired as part of the 2024 annual impairment test, resulting in zero excess fair value over carrying value, had an aggregate goodwill carrying amount after impairment of $22.4 billion as of the 2024 annual impairment test and included 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.
Brands with 10-20% fair value over carrying amount had an aggregate carrying amount of $2.4 billion as of the 2023 annual impairment test and included Miracle Whip and Ore-Ida . The aggregate carrying amount of brands with fair value over carrying amount between 20-50% was $4.2 billion as of the 2023 annual impairment test.
Brands with 10-20% fair value over carrying amount had an aggregate carrying amount of $14.2 billion as of the latest test for each brand and included Kraft, Velveeta, A1, and Bagel Bites . The aggregate carrying amount of brands with fair value over carrying amount between 20-50% was $2.8 billion as of the latest test for each brand.
Additionally, from time to time we establish and publicly announce environmental, social, and governance goals, commitments, and aspirations, including to reduce our impact on the environment. Our ability to achieve any stated goal, target, or objective is subject to numerous factors and conditions, many of which are outside of our control.
Our ability to achieve any stated goal, target, or objective is subject to numerous factors and conditions, many of which are outside of our control.
Our repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.
December 28, 2024, we had remaining authorization under the share repurchase program of approximately $1.9 billion. Our repurchase program does not obligate us to repurchase any specific dollar amount 17 or to acquire any specific number of shares.
Reporting units with 10-20% fair value over carrying amount had an aggregate goodwill carrying amount of $12.5 billion as of the 2023 annual impairment test and included Fresh, Beverages, and Desserts (“FBD”) and Latin America (“LATAM”).
Our Northern Europe reporting unit had 10-20% fair value over carrying amount with an aggregate goodwill carrying amount of $1.7 billion as of the 2024 annual impairment test.
Our success depends on our ability to maintain brand image for our existing products, extend our brands to new platforms, and expand our brand image with new product offerings. We seek to maintain, extend, and expand our brand image through marketing investments, including advertising and consumer promotions, and product innovation.
Maintaining, extending, and expanding our reputation and brand image are essential to our business success. We have many iconic brands with long-standing consumer recognition across the globe. Our success depends on our ability to maintain brand image for our existing products, extend our brands to new platforms, and expand our brand image with new product offerings.
We expect that there could be a difference between the timing of when we take pricing actions and the impact of those beneficial actions on our results of operations. Additionally, the pricing actions we take have, in some instances, negatively impacted, and could continue to negatively impact, our market share.
Additionally, the pricing actions we take have, in some instances, negatively impacted, and could continue to negatively impact, our market share and require us to reduce, or further reduce, the prices of certain of our products.
Financial Risks Our level of indebtedness, as well as our ability to comply with covenants under our debt instruments, could adversely affect our business and financial condition. We have a substantial amount of indebtedness and are permitted to incur a substantial amount of additional indebtedness, including secured debt.
We have a substantial amount of indebtedness and are permitted to incur a substantial amount of additional indebtedness, including secured debt.
Changes in the retail landscape or the loss of key retail customers could adversely affect our financial performance. Retail customers, such as supermarkets, warehouse clubs, and food distributors in our major markets, may continue to consolidate, resulting in fewer but larger customers for our business across various channels.
Retail customers, such as supermarkets, warehouse clubs, and food distributors in our major markets, may continue to consolidate, resulting in fewer but larger customers for our business across various channels. These larger customers may seek to leverage their positions to improve their profitability by demanding improved efficiency, lower pricing, more favorable terms, increased promotional programs, or specifically tailored product offerings.
We may also need to increase or reallocate spending on marketing, retail trade incentives, materials, advertising, and new product, platform, or channel innovation to maintain or increase market share. These expenditures are subject to risks, including uncertainties about trade and consumer acceptance of our efforts.
Competition amongst retailers may create consumer price deflation, affecting our retail customer relationships and presenting additional challenges to increasing prices in response to commodity or other cost increases. We may also need to increase or reallocate spending on marketing, retail trade incentives, advertising, and new product, platform, or channel innovation to maintain or increase market share.
Significant judgment, knowledge, and experience are required in determining our worldwide provision for income taxes.
See Overview in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , for a discussion of our estimated cash tax rate impact on results of operations. Significant judgment, knowledge, and experience are required in determining our worldwide provision for income taxes.
Many countries have enacted or begun the process of enacting laws based on the two-pillar plan proposals. It is not currently possible to accurately determine the potential comprehensive impact of these or future changes, but these changes could have a material impact on our effective tax rate, financial condition, and business.
Many countries have enacted or begun the process of enacting laws based on the two-pillar plan proposals. As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.
These larger customers may seek to leverage their positions to improve their profitability by demanding improved efficiency, lower pricing, more favorable terms, increased promotional programs, or specifically tailored product offerings. In addition, larger retailers have scale to develop supply chains that permit them to operate with reduced inventories or to develop and market their own private label products.
In addition, larger retailers have scale to develop supply chains that permit them to operate with reduced inventories or to develop and market their own private label products. Retail consolidation and increasing retailer power could materially and adversely affect our product sales, financial condition, and operating results.
After the 2023 annual impairment test and after reclassifying two indefinite-lived intangible asset brands to definite-lived trademarks, our indefinite-lived brands with 10% or less fair value over carrying amount had an aggregate carrying amount of $16.2 billion as of the 2023 annual impairment test and included Kraft , Oscar Mayer , Velveeta , Maxwell House , Cool Whip , and Jet Puffed.
Our indefinite-lived brands with 10% or less fair value over carrying amount, comprised entirely of brands that were impaired within 2024, resulting in zero excess fair value over carrying amount, had an aggregate carrying amount of $2.6 billion as of the latest test for each brand and included Oscar Mayer, Lunchables, Claussen , and Wattie’s.
These assumptions and estimates include estimated future annual net cash flows, 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 (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax rates, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors.
Removed
The rapid emergence of new distribution channels, particularly e-commerce, may create consumer price deflation, affecting our retail customer relationships and presenting additional challenges to increasing prices in response to commodity or other cost increases, including those related to inflationary pressures.
Added
Some of the factors, events, and contingencies discussed below may have occurred in the past, and the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, but are provided because future occurrences of such factors, events, or contingencies could have a material adverse effect.
Removed
Significant deterioration in the financial conditions of significant customers or suppliers, or in other business relationships, could materially and adversely affect our product sales, financial condition, and operating results. 9 Maintaining, extending, and expanding our reputation and brand image are essential to our business success. We have many iconic brands with long-standing consumer recognition across the globe.
Added
These expenditures are subject to risks, including uncertainties about trade and consumer acceptance of our efforts.
Removed
We may also face difficulties integrating new business operations with our current sourcing, distribution, information technology systems, and other operations.

… 12 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−0 removed23 unchanged
Biggest changeWe engage third-party service providers (including contractors and vendors) as part of our normal business operations, including collaborating with third-party experts to assist with evaluating, identifying, and managing our cybersecurity risks. 22 Our cybersecurity risk management program includes: • Ongoing audits of third-party service providers, including penetration testing and reviews of program maturity based on the National Institute of Standards and Technology (“NIST”) cybersecurity framework; • Due diligence reviews of third-party service providers’ information security programs; • Regular phishing, social engineering, and cybersecurity awareness training for employees with Company emails and access to connected devices; • Annual tabletop exercises to educate and train our personnel on response capabilities and inform adjustments to our controls and response; • Regular consultation with external advisors and specialists regarding opportunities and enhancements to strengthen our cybersecurity practices and policies; • Ongoing cybersecurity event monitoring, management, and testing of incident response procedures; and • Ongoing enhancements to cybersecurity capabilities based on evolving threats.
Biggest changeOur cybersecurity risk management program includes: • Ongoing audits of third-party service providers, including penetration testing and reviews of program maturity based on the National Institute of Standards and Technology (“NIST”) cybersecurity framework; • Due diligence reviews of third-party service providers’ information security programs; • Regular phishing, social engineering, and cybersecurity awareness training for employees with Company emails and access to connected devices; • Annual tabletop exercises to educate and train our personnel on response capabilities and inform adjustments to our controls and response; • Regular consultation with external advisors and specialists regarding opportunities and enhancements to strengthen our cybersecurity practices and policies; • Ongoing cybersecurity event monitoring, management, and testing of incident response procedures; and • Ongoing enhancements to cybersecurity capabilities based on evolving threats.
As part of the third-party risk management process, we request and review annual penetration test reports for the third-party service providers designed to assess whether all high and medium risk findings are addressed. The control environments for third-party service providers are reviewed annually.
As part of the third-party risk management process, we request and review annual penetration test reports for the third-party service providers designed to assess whether all high and medium risk findings are addressed. The control environments for third-party service providers are reviewed annually based on risk.
Our CISO works closely with our Chief Global Ethics and Compliance Officer and Chief Legal and Corporate Affairs Officer to oversee compliance with legal, regulatory, and contractual security requirements. The CISO’s team evaluates third-party service providers to a degree commensurate with the risk their services pose to us.
Our CISO works closely with our Chief Global Ethics and Compliance Officer and Global General Counsel and Corporate Affairs Officer to oversee compliance with legal, regulatory, 22 and contractual security requirements. The CISO’s team evaluates third-party service providers to a degree commensurate with the risk their services pose to us.
As part of that program, we also provide feedback to service providers about risks they can reduce using commercially available safeguards.
As part of that program, we also provide feedback to service providers about risks they can reduce using commercially available safeguards. Additionally, the information security team works in partnership with the Company’s internal audit team to review information technology-related internal controls as part of our overall internal controls process.
We plan for, implement, and improve safeguards that are designed to reduce unacceptable risks to any foreseeably harmed party.
We plan for, implement, and improve safeguards that are designed to reduce unacceptable risks to any foreseeably harmed party. We engage third-party service 21 providers (including contractors and vendors) as part of our normal business operations, including collaborating with third-party experts to assist with evaluating, identifying, and managing our cybersecurity risks.
Additionally, the information security team works in partnership with the Company’s internal audit team to review information technology-related internal controls as part of our overall internal controls process. 23 The Audit Committee is responsible for oversight of the Company’s information technology and cybersecurity risks.
The Audit Committee is responsible for oversight of the Company’s information technology and cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

5 edited+1 added−0 removed0 unchanged
Biggest changeWe also enter into co-manufacturing arrangements with third parties if we determine it is advantageous to outsource the production of any of our products. In 2023, we ceased operations of our facility in Irvine, California in our North America segment and two manufacturing facilities in China within our International segment as part of our planned restructuring activities.
Biggest changeWe maintain all of our manufacturing and processing facilities in good condition and believe they are suitable and are adequate for our present needs. We also enter into co-manufacturing arrangements with third parties if we determine it is advantageous to outsource the production of any of our products.
Item 2. Properties. Our corporate co-headquarters are located in Pittsburgh, Pennsylvania and Chicago, Illinois. Our co-headquarters are leased and house certain executive offices, our U.S. business units, and our administrative, finance, legal, and human resource functions. We maintain additional owned and leased offices throughout the regions in which we operate.
Item 2. Properties. Our corporate co-headquarters are located in Pittsburgh, Pennsylvania and Chicago, Illinois. Our co-headquarters are leased and house certain executive offices, our North America business units, and our administrative, finance, legal, and human resource functions. We maintain additional owned and leased offices throughout the regions in which we operate.
We manufacture our products in our network of manufacturing and processing facilities located throughout the world. As of December 30, 2023, we operated 75 manufacturing and processing facilities. We own 70 and lease five of these facilities.
We manufacture our products in our network of manufacturing and processing facilities located throughout the world. As of December 28, 2024, we operated 70 manufacturing and processing facilities. We own 66 and lease four of these facilities.
See Note 5, Restructuring Activities , in Item 8, Financial Statements and Supplementary Data , for additional information on our exit and disposal costs.
See Note 5, Restructuring Activities , and Note 4, Acquisitions and Divestitures , in Item 8, Financial Statements and Supplementary Data , for additional information.
Our manufacturing and processing facilities count by segment as of December 30, 2023 was: Owned Leased North America 32 2 International 38 3 We maintain all of our manufacturing and processing facilities in good condition and believe they are suitable and are adequate for our present needs.
Our manufacturing and processing facilities count by segment as of December 28, 2024 was: Owned Leased North America 32 2 International Developed Markets 17 — Emerging Markets (a) 17 2 (a) Emerging Markets represents the aggregation of our WEEM and AEM operating segments.
Added
In 2024, as part of our planned restructuring and divestiture activities, we sold a manufacturing facility in Papua New Guinea and a manufacturing facility in Indonesia within our Asia Emerging Markets operating segment and two manufacturing facilities in Russia within our West and East Emerging Markets operating segment.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed1 unchanged
Biggest changeKraft Heinz S&P 500 S&P Consumer Staples Food and Soft Drink Products December 28, 2018 $ 100.00 $ 100.00 $ 100.00 December 27, 2019 76.72 132.97 128.43 December 24, 2020 89.80 154.78 135.53 December 23, 2021 94.37 200.34 153.96 December 30, 2022 113.64 165.48 170.15 December 29, 2023 107.91 208.99 161.89 The above performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. 25 Issuer Purchases of Equity Securities During the Three Months Ended December 30, 2023 Our share repurchase activity in the three months ended December 30, 2023 was: Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) 10/01/2023 — 11/04/2023 143,353 $ 33.74 — $ — 11/05/2022 — 12/02/2023 2,139,192 35.12 2,135,574 2,925 12/03/2023 — 12/30/2023 6,153,670 36.60 6,149,491 2,700 Total 8,436,215 8,285,065 (a) Includes (1) shares purchased pursuant to the share repurchase program described in (b) below, (2) shares repurchased to offset the dilutive effect of the exercise of stock options using option exercise proceeds and the vesting restricted stock units (“RSUs”) and performance share units (“PSUs”), and (3) shares withheld for tax liabilities associated with the vesting of RSUs and PSUs.
Biggest changeKraft Heinz S&P 500 S&P Consumer Staples Food and Soft Drink Products December 27, 2019 $ 100.00 $ 100.00 $ 100.00 December 24, 2020 117.05 116.40 105.53 December 23, 2021 123.00 150.67 119.88 December 30, 2022 148.13 124.45 132.48 December 29, 2023 140.65 157.17 126.06 December 27, 2024 122.27 199.45 125.01 The above performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. 24 Issuer Purchases of Equity Securities During the Three Months Ended December 28, 2024 Our share repurchase activity in the three months ended December 28, 2024 was: Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) 9/29/2024 — 11/02/2024 185,482 $ 33.57 180,000 $ 2,345 11/03/2024 — 11/30/2024 13,087,165 31.43 13,083,641 1,933 12/01/2024 — 12/28/2024 1,023,906 31.57 1,023,713 1,901 Total 14,296,553 14,287,354 (a) Includes (1) shares purchased pursuant to the share repurchase program described in (b) below, (2) shares withheld for tax liabilities associated with the vesting of RSUs.
Under the program, shares may be repurchased in open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, privately negotiated transactions, transactions structured through investment banking institutions, or other means. Item 6. [Reserved]. 26
Under the program, shares may be repurchased in open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, privately negotiated transactions, transactions structured through investment banking institutions, or other means. Item 6. [Reserved]. 25
Companies included in the S&P Consumer Staples Food and Soft Drink Products index change periodically and are presented on the basis of the index as it is comprised on December 30, 2023.
Companies included in the S&P Consumer Staples Food and Soft Drink Products index change periodically and are presented on the basis of the index as it is comprised on December 28, 2024.
This graph covers the five-year period from December 28, 2018 (the last trading day of our fiscal year 2018) through December 29, 2023 (the last trading day of our fiscal year 2023). The graph shows total shareholder return assuming $100 was invested on December 28, 2018 and the dividends were reinvested on a daily basis.
This graph covers the five-year period from December 27, 2019 (the last trading day of our fiscal year 2019) through December 27, 2024 (the last trading day of our fiscal year 2024). The graph shows total shareholder return assuming $100 was invested on December 27, 2019 and the dividends were reinvested on a daily basis.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on The Nasdaq Stock Market LLC (Nasdaq) under the ticker symbol “KHC.” At February 10, 2024, there were approximately 37,627 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on The Nasdaq Stock Market LLC (Nasdaq) under the ticker symbol “KHC.” At February 8, 2025, there were approximately 34,653 holders of record of our common stock.
See Equity and Dividends in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , for a discussion of cash dividends declared on our common stock. 24 Comparison of Cumulative Total Return The following graph compares the cumulative total return on our common stock with the cumulative total return of the S&P 500 Index and the S&P Consumer Staples Food and Soft Drink Products, which we consider to be our peer group.
Comparison of Cumulative Total Return The following graph compares the cumulative total return on our common stock with the cumulative total return of the S&P 500 Index and the S&P Consumer Staples Food and Soft Drink Products, which we consider to be our peer group.
Added
See Equity and Dividends in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , for a discussion of cash dividends declared on our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

4 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved]. 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 27 Overview 27 Consolidated Results of Operations 28 Results of Operations by Segment 30 Liquidity and Capital Resources 32 Commodity Trends 37 Critical Accounting Estimates 37 New Accounting Pronouncements 41 Contingencies 41 Non-GAAP Financial Measures 41 Item 7A.
Biggest changeItem 6. [Reserved]. 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 26 Overview 26 Consolidated Results of Operations 27 Results of Operations by Segment 31 Liquidity and Capital Resources 35 Commodity Trends 40 Critical Accounting Estimates 40 New Accounting Pronouncements 44 Contingencies 44 Non-GAAP Financial Measures 44 Item 7A.
Basis of Presentation 54 Note 2. Significant Accounting Policies 55 Note 3. New Accounting Standards 59 Note 4. Acquisitions and Divestitures 60 Note 5. Restructuring Activities 65 Note 6. Inventories 66 Note 7. Property, Plant and Equipment 66 Note 8. Goodwill and Intangible Assets 67 Note 9. Income Taxes 72 Note 10. Employees’ Stock Incentive Plans 75 Note 11.
Basis of Presentation 60 Note 2. Significant Accounting Policies 61 Note 3. New Accounting Standards 66 Note 4. Acquisitions and Divestitures 66 Note 5. Restructuring Activities 69 Note 6. Inventories 71 Note 7. Property, Plant and Equipment 71 Note 8. Goodwill and Intangible Assets 71 Note 9. Income Taxes 77 Note 10. Employees’ Stock Incentive Plans 80 Note 11.
Quantitative and Qualitative Disclosures about Market Risk. 45 Item 8. Financial Statements and Supplementary Data. 46 Report of Independent Registered Public Accounting Firm 46 Consolidated Statements of Income 49 Consolidated Statements of Comprehensive Income 50 Consolidated Balance Sheets 51 Consolidated Statements of Equity 52 Consolidated Statements of Cash Flows 53 Notes to Consolidated Financial Statements 54 Note 1.
Quantitative and Qualitative Disclosures about Market Risk. 50 Item 8. Financial Statements and Supplementary Data. 51 Report of Independent Registered Public Accounting Firm 51 Consolidated Statements of Income 55 Consolidated Statements of Comprehensive Income 56 Consolidated Balance Sheets 57 Consolidated Statements of Equity 58 Consolidated Statements of Cash Flows 59 Notes to Consolidated Financial Statements 60 Note 1.
Postemployment Benefits 78 Note 12. Financial Instruments 88 Note 13. Accumulated Other Comprehensive Income/(Losses) 93 Note 14. Financing Arrangements 95 Note 15. Commitments and Contingencies 96 Note 16. Debt 98 Note 17. Leases 102 Note 18. Capital Stock 103 Note 19. Earnings Per Share 104 Note 20. Segment Reporting 105 Note 21. Other Financial Data 107
Postemployment Benefits 84 Note 12. Financial Instruments 94 Note 13. Accumulated Other Comprehensive Income/(Losses) 99 Note 14. Financing Arrangements 103 Note 15. Commitments and Contingencies 103 Note 16. Debt 105 Note 17. Leases 107 Note 18. Capital Stock 109 Note 19. Earnings Per Share 110 Note 20. Segment Reporting 110 Note 21. Other Financial Data 115

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

122 edited+67 added−19 removed67 unchanged
Biggest changeAdjusted EPS is defined as diluted EPS excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including, when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis. 41 The Kraft Heinz Company Reconciliation of Net Sales to Organic Net Sales (dollars in millions) (Unaudited) Net Sales Currency Acquisitions and Divestitures 53rd Week Organic Net Sales Price Volume/Mix 2023 North America $ 20,126 $ (65) $ — $ — $ 20,191 International 6,514 (103) 34 — 6,583 Kraft Heinz $ 26,640 $ (168) $ 34 $ — $ 26,774 2022 North America $ 20,340 $ — $ — $ 357 $ 19,983 International 6,145 82 60 97 5,906 Kraft Heinz $ 26,485 $ 82 $ 60 $ 454 $ 25,889 Year-over-year growth rates North America (1.0) % (0.3) pp 0.0 pp (1.7) pp 1.0 % 7.5 pp (6.5) pp International 6.0 % (3.2) pp (0.5) pp (1.8) pp 11.5 % 13.6 pp (2.1) pp Kraft Heinz 0.6 % (0.9) pp (0.1) pp (1.8) pp 3.4 % 8.9 pp (5.5) pp 42 The Kraft Heinz Company Reconciliation of Net Income/(Loss) to Adjusted EBITDA (in millions) (Unaudited) December 30, 2023 December 31, 2022 Net income/(loss) $ 2,846 $ 2,368 Interest expense 912 921 Other expense/(income) 27 (253) Provision for/(benefit from) income taxes 787 598 Operating income/(loss) 4,572 3,634 Depreciation and amortization (excluding restructuring activities) 923 922 Divestiture-related license income (54) (56) Restructuring activities 60 74 Deal costs — 9 Unrealized losses/(gains) on commodity hedges 1 63 Impairment losses 662 999 Certain non-ordinary course legal and regulatory matters 2 210 Equity award compensation expense 141 148 Adjusted EBITDA $ 6,307 $ 6,003 43 The Kraft Heinz Company Reconciliation of Diluted EPS to Adjusted EPS (Unaudited) December 30, 2023 December 31, 2022 Diluted EPS $ 2.31 $ 1.91 Restructuring activities (a) 0.16 0.05 Unrealized losses/(gains) on commodity hedges (b) — 0.04 Impairment losses (c) 0.50 0.70 Certain non-ordinary course legal and regulatory matters (d) — 0.13 Losses/(gains) on sale of business (e) — (0.01) Other losses/(gains) related to acquisitions and divestitures (f) — (0.02) Nonmonetary currency devaluation (g) 0.02 0.01 Debt prepayment and extinguishment (benefit)/costs (h) — (0.03) Certain significant discrete income tax items (i) (0.01) — Adjusted EPS $ 2.98 $ 2.78 (a) Gross expenses/(income) included in restructuring activities were expenses of $225 million ($193 million after-tax) in 2023 and $74 million ($56 million after-tax) in 2022 and were recorded in the following income statement line items: • Cost of products sold included expenses of $57 million in 2023 and $27 million in 2022; • SG&A included expenses of $3 million in 2023 and $47 million in 2022; and • Other expense/(income) included expenses of $165 million in 2023.
Biggest changeAdjusted EPS is defined as diluted EPS excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items, and including, when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis. 45 The Kraft Heinz Company Reconciliation of Net Sales to Organic Net Sales (dollars in millions) (Unaudited) Net Sales Currency Acquisitions and Divestitures Organic Net Sales Price Volume/Mix 2024 North America $ 19,543 $ (27) $ — $ 19,570 International Developed Markets 3,535 13 — 3,522 Emerging Markets 2,768 (101) 12 2,857 Kraft Heinz $ 25,846 $ (115) $ 12 $ 25,949 2023 North America $ 20,126 $ — $ — $ 20,126 International Developed Markets 3,623 — — 3,623 Emerging Markets 2,891 77 67 2,747 Kraft Heinz $ 26,640 $ 77 $ 67 $ 26,496 Year-over-year growth rates North America (2.9) % (0.1) pp 0.0 pp (2.8) % 1.4 pp (4.2) pp International Developed Markets (2.4) % 0.4 pp 0.0 pp (2.8) % 0.0 pp (2.8) pp Emerging Markets (4.3) % (6.2) pp (2.1) pp 4.0 % 3.5 pp 0.5 pp Kraft Heinz (3.0) % (0.7) pp (0.2) pp (2.1) % 1.4 pp (3.5) pp 46 Net Sales Impact of Currency Impact of Acquisitions and Divestitures Impact of 53rd Week Organic Net Sales Price Volume/Mix 2023 North America 20,126 (65) — — 20,191 International Developed Markets 3,623 (15) 7 — 3,631 Emerging Markets 2,891 (88) 27 — 2,952 Kraft Heinz 26,640 (168) 34 — 26,774 2022 North America 20,340 — — 357 19,983 International Developed Markets 3,401 — 30 56 3,315 Emerging Markets 2,744 82 30 41 2,591 Kraft Heinz 26,485 82 60 454 25,889 Year-over-year growth rates North America (1.0) % (0.3) pp 0.0 pp (1.7) pp 1.0 % 7.5 pp (6.5) pp International Developed Markets 6.5 % (0.5) pp (0.7) pp (1.8) pp 9.5 % 15.6 pp (6.1) pp Emerging Markets 5.4 % (6.6) pp (0.2) pp (1.7) pp 13.9 % 10.9 pp 3.0 pp Kraft Heinz 0.6 % (0.9) pp (0.1) pp (1.8) pp 3.4 % 8.9 pp (5.5) pp 47 The Kraft Heinz Company Reconciliation of Operating Income/(Loss) to Adjusted Operating Income (in millions) (Unaudited) December 28, 2024 December 30, 2023 December 31, 2022 Operating income/(loss) 1,683 4,572 3,634 Restructuring activities 27 60 74 Deal costs — — 9 Unrealized losses/(gains) on commodity hedges (19) 1 63 Impairment losses 3,669 662 999 Certain non-ordinary course legal and regulatory matters — 2 210 Adjusted Operating Income $ 5,360 $ 5,297 $ 4,989 48 The Kraft Heinz Company Reconciliation of Diluted EPS to Adjusted EPS (Unaudited) December 28, 2024 December 30, 2023 December 31, 2022 Diluted EPS $ 2.26 $ 2.31 $ 1.91 Restructuring activities (a) 0.01 0.16 0.05 Unrealized losses/(gains) on commodity hedges (b) (0.01) — 0.04 Impairment losses (c) 2.58 0.50 0.70 Certain non-ordinary course legal and regulatory matters (d) — — 0.13 Losses/(gains) on sale of business (e) 0.05 — (0.01) Other losses/(gains) related to acquisitions and divestitures (f) — — (0.02) Nonmonetary currency devaluation (g) 0.01 0.02 0.01 Debt prepayment and extinguishment (benefit)/costs (h) — — (0.03) Certain significant discrete income tax items (i) (1.84) (0.01) — Adjusted EPS $ 3.06 $ 2.98 $ 2.78 (a) Gross expenses/(income) included in restructuring activities were expenses of $20 million ($18 million after-tax) in 2024, $225 million ($193 million after-tax) in 2023 and $74 million ($56 million after-tax) in 2022 and were recorded in the following income statement line items: • Cost of products sold included expenses of $8 million in 2024, $57 million in 2023 and $27 million in 2022; • SG&A included expenses of $19 million in 2024, $3 million in 2023, and $47 million in 2022; and • Other expense/(income) included income of $7 million in 2024 and expenses of $165 million in 2023.
See the Non-GAAP Financial Measures section at the end of this item.
See the Non-GAAP Financial Measures section at the end of this item.
Contingencies See Note 15, Commitments and Contingencies , in Item 8, Financial Statements and Supplementary Data , for a discussion of our contingencies. Non-GAAP Financial Measures The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.
Contingencies See Note 15, Commitments and Contingencies , in Item 8, Financial Statements and Supplementary Data , for a discussion of our contingencies. Non-GAAP Financial Measures The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S.
Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual net cash flows for each reporting unit (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax rates, long-term growth rates, a discount rate that appropriately reflects the risks inherent in each future cash flow stream, and other market factors.
Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual net cash flows for each reporting unit (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax rates, long-term growth rates, royalty rates, a discount rate that appropriately reflects the risks inherent in each future cash flow stream, and other market factors.
(b) Represents long-term lending due from and long-term borrowings due to non-guarantor subsidiaries. 36 Commodity Trends We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
(b) Represents long-term lending due from and long-term borrowings due to non-guarantor subsidiaries. Commodity Trends We purchase and use large quantities of commodities, including dairy products, meat products, tomato products, sugar and other sweeteners, soybean and vegetable oils, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture our products.
We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management’s plans, and guideline companies. 38 We utilize the excess earnings method under the income approach to estimate the fair value of certain of our largest brands.
We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management’s plans, and guideline companies. We utilize the excess earnings method under the income approach to estimate the fair value of certain of our largest brands.
We review and adjust these estimates at least quarterly based on actual experience and other information. Advertising expenses are recorded in SG&A. For interim reporting purposes, we charge advertising to operations as a percentage of estimated full year sales activity and marketing costs. We then review and adjust these estimates each quarter based on actual experience and other information.
We review and adjust these estimates at least quarterly based on actual experience and other information. 40 Advertising expenses are recorded in SG&A. For interim reporting purposes, we charge advertising to operations as a percentage of estimated full year sales activity and marketing costs. We then review and adjust these estimates each quarter based on actual experience and other information.
We model these discount rates using a portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. Our 2024 expected return on plan assets will be 6.3% (net of applicable taxes) for our postretirement plans.
We model these discount rates using a portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. Our 2025 expected return on plan assets will be 6.3% (net of applicable taxes) for our postretirement plans.
We established this rate based upon our most recent experience as well as our expectation for health care trend rates going forward. We anticipate the weighted average assumed ultimate trend rate will be 4.8%. The year in which the ultimate trend rate is reached varies by plan, ranging between the years 2026 and 2035.
We established this rate based upon our most recent experience as well as our expectation for health care trend rates going forward. We anticipate the weighted average assumed ultimate trend rate will be 4.8%. The year in which the ultimate trend rate is reached varies by plan, ranging between the years 2027 and 2035.
Adjusted EPS increased 7.2% to $2.98 in 2023 compared to $2.78 in 2022 primarily driven by higher Adjusted EBITDA and lower interest expense, which more than offset the decrease from lapping a 53rd week of shipments in the prior period, unfavorable changes in other expense/(income), and higher taxes on adjusted earnings.
Adjusted EPS increased 7.2% to $2.98 in 2023 compared to $2.78 in 2022, primarily driven by higher Adjusted Operating Income and lower interest expense, which more than offset the decrease from lapping a 53rd week of shipments in the prior period, unfavorable changes in other expense/(income), and higher taxes on adjusted earnings.
Beyond 2024, we are unable to reliably estimate the timing of contributions to our pension or postretirement plans. 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 or postretirement asset performance or interest rates, or other factors.
Beyond 2025, we are unable to reliably estimate the timing of contributions to our pension or postretirement plans. 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 or postretirement asset performance or interest rates, or other factors.
Any actuarial gains and losses in excess of the corridor are then amortized over an appropriate term based on whether the plan is active or inactive. For our postretirement benefit plans, our 2024 health care cost trend rate assumption will be 6.2%.
Any actuarial gains and losses in excess of the corridor are then amortized over an appropriate term based on whether the plan is active or inactive. For our postretirement benefit plans, our 2025 health care cost trend rate assumption will be 6.2%.
See below for discussion and analysis of our financial condition and results of operations for 2023 compared to 2022.
See below for discussion and analysis of our financial condition and results of operations for 2024 compared to 2023 and for 2023 compared to 2022.
Our reporting units and brands that were impaired in 2023, 2022, and 2021 were written down to their respective fair values resulting in zero excess fair value over carrying amount as of the applicable impairment test dates.
Our reporting units and 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.
The 2023 expenses primarily relate to the settlement of one of our U.K. defined benefit pension plans. See Note 11, Postemployment Benefits , in Item 8, Financial Statements and Supplementary Data , for additional information.
The 2024 income and 2023 expenses primarily relate to the settlement of one of our U.K. defined benefit pension plans. See Note 11, Postemployment Benefits , in Item 8, Financial Statements and Supplementary Data , for additional information.
This decrease was primarily due to the repayment of 750 million euro aggregate principal amount of senior notes due in June 2023, which more than offset the issuance of 600 million euro aggregate principal amount of floating rate senior notes issued in May 2023.
The decrease of debt in 2023 was primarily due to the repayment of 750 million euro aggregate principal amount of senior notes due in June 2023, which more than offset the issuance of 600 million euro aggregate principal amount of floating rate senior notes issued in May 2023.
We believe that Organic Net Sales, Adjusted EBITDA, and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis.
We believe that Organic Net Sales, Adjusted Operating Income, and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis.
This increase was primarily driven by lower cash outflows in the current year for inventories, primarily related to stock rebuilding in the prior year, lower cash outflows in the current year for cash tax payments driven by cash taxes paid in 2022 related to the Cheese Transaction, higher Adjusted EBITDA in 2023, and lower interest payments in the current period due to the reduction of long-term debt throughout 2022.
This increase was primarily driven by lower cash outflows in the current year for inventories, primarily related to stock rebuilding in the prior year, lower cash outflows in the current year for cash tax payments driven by cash taxes paid in 2022 related to the Cheese Transaction, higher Adjusted Operating Income in 2023, and lower interest payments in the current period due to the reduction of long-term debt throughout 2022.
Accordingly, these and other reporting units and brands that have 20% or less excess fair value over carrying amount as of the 2023 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.
Accordingly, these and other reporting units and brands that had 20% or less excess fair value over carrying amount as of the 2024 annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.
Fiscal Year 2023 Compared to Fiscal Year 2022: Net sales increased 6.0% to $6.5 billion in 2023 compared to $6.1 billion in 2022, including the unfavorable impacts of foreign currency (3.2 pp), lapping a 53rd week of shipments in the prior period (1.8 pp), and acquisitions and divestitures (0.5 pp).
Fiscal Year 2023 Compared to Fiscal Year 2022 : Net sales increased 6.5% to $3.6 billion in 2023 compared to $3.4 billion in 2022, including the unfavorable impacts of lapping a 53rd week of shipments in the prior period (1.8 pp), acquisitions and divestitures (0.7 pp), and foreign currency (0.5 pp).
The amount of unrecognized deferred tax liabilities for local country withholding taxes that would be owed, if repatriated, related to our 2018 through 2023 accumulated earnings of certain international subsidiaries is approximately $60 million. Our undistributed historical earnings in foreign subsidiaries through December 31, 2017 are currently not considered to be indefinitely reinvested.
The amount of unrecognized deferred tax liabilities for local country withholding taxes that would be owed, if repatriated, related to our 2018 through 2024 accumulated earnings of certain international subsidiaries is approximately $80 million. Our undistributed historical earnings in foreign subsidiaries through December 31, 2017 are currently not considered to be indefinitely reinvested.
Our Credit Agreement contains customary representations, warranties, and covenants that are typical for these types of facilities and could, upon the occurrence of certain events of default, restrict our ability to access our Senior Credit Facility. We were in compliance with all financial covenants as of December 30, 2023.
Our credit agreement contains customary representations, warranties, and covenants that are typical for these types of facilities and could, upon the occurrence of certain events of default, restrict our ability to access our Senior Credit Facility. We were in compliance with all financial covenants as of December 28, 2024.
Interest on variable rate long-term debt is calculated based on interest rates at December 30, 2023. (b) Amounts represent the expected cash payments of our finance leases, including expected cash payments of interest expense. (c) Operating leases represent the minimum rental commitments under non-cancellable operating leases net of sublease income.
Interest on variable rate long-term debt is calculated based on interest rates at December 28, 2024. (b) Amounts represent the expected cash payments of our finance leases, including expected cash payments of interest expense. (c) Operating leases represent the minimum rental commitments under non-cancellable operating leases net of sublease income.
(b) Gross expenses/(income) included in unrealized losses/(gains) on commodity hedges were expenses of $1 million ($1 million after-tax) in 2023 and $63 million ($48 million after-tax) in 2022 and were recorded in cost of products sold.
(b) Gross expenses/(income) included in unrealized losses/(gains) on commodity hedges were income of $19 million ($15 million after-tax) in 2024, expenses of $1 million ($1 million after-tax) in 2023 and expenses of $63 million ($48 million after-tax) in 2022 and were recorded in cost of products sold.
Our definition of advertising expenses includes advertising production costs, in-store advertising costs, agency fees, brand promotions and events, and sponsorships, in addition to costs to obtain advertising in television, radio, print, digital, and social channels. We recorded advertising expenses of $1,071 million in 2023, $945 million in 2022, and $1,039 million in 2021.
Our definition of advertising expenses includes advertising production costs, in-store advertising costs, agency fees, brand promotions and events, and sponsorships, in addition to costs to obtain advertising in television, radio, print, digital, and social channels. We recorded advertising expenses of $1,031 million in 2024, $1,071 million in 2023, and $945 million in 2022.
However, as it is reasonably possible that changes in assumptions could occur, as a sensitivity measure, we have presented the estimated effects of isolated changes in discount rates, long-term growth rates, and royalty rates on the fair values of our reporting units and brands with 20% or less excess fair value over carrying amount.
However, as it is reasonably possible that changes in assumptions could occur, as a sensitivity measure, we have presented the estimated effects of isolated changes in discount rates, long-term growth rates, and royalty rates (for our brands valued utilizing the relief from royalty method) on the fair values of our reporting units and brands with 20% or less excess fair value over carrying amount.
Adjusted EBITDA increased 5.1% to $6.3 billion in 2023 compared to $6.0 billion in 2022, primarily due to higher pricing and efficiency gains, which more than offset higher commodity costs, including the impact of realized gains and losses on commodity hedges; higher supply chain costs, reflecting inflationary pressure in manufacturing, procurement, and logistics; unfavorable volume/mix; increased SG&A, particularly in advertising expenses; the decrease from lapping a 53rd week of shipments in the prior period (2.1 pp); and the unfavorable impact of foreign currency (0.9 pp).
Adjusted Operating Income increased 6.2% to $5.3 billion in 2023 compared to $5.0 billion in 2022, primarily due to higher pricing and the beneficial impact from our efficiency initiatives, which more than offset higher commodity costs, including the impact of realized gains and losses on commodity hedges; higher supply chain costs, reflecting inflationary pressure in manufacturing, procurement, and logistics; unfavorable volume/mix; increased SG&A, primarily advertising expenses; the decrease from lapping a 53rd week of shipments in the prior period (2.2 pp); and the unfavorable impact of foreign currency (1.2 pp).
Management uses these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect our underlying operations.
GAAP, and there are limitations to using non-GAAP financial measures. Management uses these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect our underlying operations.
Certain other long-term liabilities related to income taxes, insurance accruals, and other accruals included on the consolidated balance sheet are excluded from the above table as we are unable to estimate the timing of payments for these items. Pension plan contributions were $11 million in 2023. We estimate that 2024 pension plan contributions will be approximately $10 million.
Certain other long-term liabilities related to income taxes, insurance accruals, and other accruals included on the consolidated balance sheet are excluded from the above table as we are unable to estimate the timing of payments for these items. Pension plan contributions were $7 million in 2024. We estimate that 2025 pension plan contributions will be approximately $6 million.
The discount rates, long-term growth rates, and royalty rates used to estimate the fair values of our reporting units and our brands with 20% or less excess fair value over carrying amount, as well as the goodwill or brand carrying amounts, as of the 2023 annual impairment test for each reporting unit or brand, were as follows: Goodwill or Brand Carrying Amount (in billions) Discount Rate Long-Term Growth Rate Royalty Rate Minimum Maximum Minimum Maximum Minimum Maximum Reporting units $ 30.1 7.8 % 10.8 % 1.5 % 2.5 % Brands (excess earnings method) 14.9 8.3 % 8.6 % 1.0 % 1.9 % Brands (relief from royalty method) 3.7 8.3 % 8.6 % 0.5 % 2.0 % 6.0 % 20.0 % Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment test date.
The discount rates, long-term growth rates, and royalty rates (for our brands valued utilizing the relief from royalty method) used to estimate the fair values of our reporting units and our brands with 20% or less excess fair value over carrying amount, as well as the goodwill or brand carrying amounts, as of the latest test for each reporting unit and brand were as follows: Goodwill or Brands Carrying Amount (in billions) Discount Rate Long-Term Growth Rate Royalty Rate Minimum Maximum Minimum Maximum Minimum Maximum Reporting units $ 24.1 7.8 % 12.0 % 1.3 % 4.0 % Brands (excess earnings method) 13.2 8.3 % 8.6 % 1.3 % 1.8 % Brands (relief from royalty method) 3.6 8.4 % 9.3 % 0.5 % 2.0 % 4.0 % 20.0 % Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment test date.
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 year ended December 31, 2022.
No amounts were drawn on our Senior Credit Facility at December 28, 2024, December 30, 2023, or December 31, 2022. No amounts were drawn on our Senior Credit Facility during the years ended December 28, 2024, December 30, 2023 or December 31, 2022, or on the Previous Senior Credit Facility during the year ended December 31, 2022.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. Our 2024 discount rate assumption will be 5.2% for service cost and 5.1% for interest cost for our postretirement plans.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. Our 2025 discount rate assumption will be 5.6% for service cost and 5.2% for interest cost for our postretirement plans.
As such, estimated pension and postretirement plan contributions for 2024 have been excluded from the above table. At December 30, 2023, the amount of net unrecognized tax benefits for uncertain tax positions, including an accrual of related interest and penalties along with positions only impacting the timing of tax benefits, was approximately $543 million.
As such, estimated pension and postretirement plan contributions for 2025 have been excluded from the above table. At December 28, 2024, the amount of net unrecognized tax benefits for uncertain tax positions, including an accrual of related interest and penalties along with positions only impacting the timing of tax benefits, was approximately $481 million.
Fiscal Year 2023 Compared to Fiscal Year 2022: Net sales increased 0.6% to $26.6 billion in 2023 compared to $26.5 billion in 2022, including the unfavorable impacts of lapping a 53rd week of shipments in the prior period (1.8 pp), foreign currency (0.9 pp), and acquisitions and divestitures (0.1 pp).
Fiscal Year 2023 Compared to Fiscal Year 2022 : Net sales increased 5.4% to $2.9 billion in 2023 compared to $2.7 billion in 2022, including the unfavorable impacts of foreign currency (6.6 pp), lapping a 53rd week of shipments in the prior period (1.7 pp), and acquisitions and divestitures (0.2 pp).
Consolidated Results of Operations Summary of Results: December 30, 2023 December 31, 2022 % Change (in millions, except per share data) Net sales $ 26,640 $ 26,485 0.6 % Operating income/(loss) 4,572 3,634 25.8 % Net income/(loss) 2,846 2,368 20.2 % Net income/(loss) attributable to common shareholders 2,855 2,363 20.8 % Diluted EPS 2.31 1.91 20.9 % Net Sales: December 30, 2023 December 31, 2022 % Change (in millions) Net sales $ 26,640 $ 26,485 0.6 % Organic Net Sales (a) 26,774 25,889 3.4 % (a) Organic Net Sales is a non-GAAP financial measure.
Consolidated Results of Operations Summary of Results: December 28, 2024 December 30, 2023 % Change December 30, 2023 December 31, 2022 % Change (in millions, except per share data) (in millions, except per share data) Net sales $ 25,846 $ 26,640 (3.0) % $ 26,640 $ 26,485 0.6 % Operating income/(loss) 1,683 4,572 (63.2) % 4,572 3,634 25.8 % Net income/(loss) 2,746 2,846 (3.5) % 2,846 2,368 20.2 % Net income/(loss) attributable to common shareholders 2,744 2,855 (3.9) % 2,855 2,363 20.8 % Diluted EPS 2.26 2.31 (2.2) % 2.31 1.91 20.9 % Net Sales: December 28, 2024 December 30, 2023 % Change December 30, 2023 December 31, 2022 % Change (in millions) (in millions) Net sales $ 25,846 $ 26,640 (3.0) % $ 26,640 $ 26,485 0.6 % Organic Net Sales (a) 25,949 26,496 (2.1) % 26,774 25,889 3.4 % (a) Organic Net Sales is a non-GAAP financial measure.
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.
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.
Diluted Earnings Per Share (“EPS”): December 30, 2023 December 31, 2022 % Change (in millions, except per share data) Diluted EPS $ 2.31 $ 1.91 20.9 % Adjusted EPS (a) 2.98 2.78 7.2 % (a) Adjusted EPS is a non-GAAP financial measure.
Diluted Earnings Per Share (“EPS”): December 28, 2024 December 30, 2023 % Change December 30, 2023 December 31, 2022 % Change (in millions, except per share data) (in millions, except per share data) Diluted EPS $ 2.26 $ 2.31 (2.2) % $ 2.31 $ 1.91 20.9 % Adjusted EPS (a) 3.06 2.98 2.7 % 2.98 2.78 7.2 % (a) Adjusted EPS is a non-GAAP financial measure.
(c) Gross impairment losses included the following: • Goodwill impairment losses of $510 million ($510 million after-tax) in 2023 and $444 million ($444 million after-tax) in 2022, which were recorded in SG&A; • Intangible asset impairment losses of $152 million ($116 million after-tax) in 2023 and $469 million ($358 million after-tax) in 2022, which were recorded in SG&A; and • Property, plant and equipment asset impairment losses of $86 million ($65 million after-tax) in 2022, which were recorded in cost of products sold.
(c) Gross impairment losses included the following: • Goodwill impairment losses of $1.6 billion ($1.6 billion after-tax) in 2024, $510 million ($510 million after-tax) in 2023, and $444 million ($444 million after-tax) in 2022, which were recorded in SG&A; • Intangible asset impairment losses of $2.0 billion ($1.6 billion after-tax) in 2024, $152 million ($116 million after-tax) in 2023, and $469 million ($358 million after-tax) in 2022, which were recorded in SG&A; and • Property, plant and equipment asset impairment losses of $86 million ($65 million after-tax) in 2022, which were recorded in cost of products sold.
See Note 4, Acquisitions and Divestitures , and Note 8, Goodwill and Intangible Assets , in Item 8, Financial Statements and Supplementary Data , for additional information on these impairment losses. 53rd Week: We operate on a 52- or 53-week fiscal year ending on the last Saturday in December in each calendar year.
See Note 8, Goodwill and Intangible Assets , in Item 8, Financial Statements and Supplementary Data , for additional information on our goodwill and intangible asset impairment losses. 53rd Week: We operate on a 52- or 53-week fiscal year ending on the last Saturday in December in each calendar year.
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.
Segment Adjusted Operating Income is a financial measure 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 Operating Income to allocate resources.
These net actuarial gains and losses are deferred into accumulated other comprehensive income/(losses) and amortized within other expense/(income) in future periods using the corridor approach. The corridor is 10% of the greater of the market-related value of the plan’s asset or projected benefit obligation.
Changes in the fair value of our plan assets result in net actuarial gains or losses. These net actuarial gains and losses are deferred into accumulated other comprehensive income/(losses) and amortized within other expense/(income) in future periods using the corridor approach. The corridor is 10% of the greater of the market-related value of the plan’s asset or projected benefit obligation.
Our 2024 expected rate of return on plan assets will be 6.6% for our U.S. pension plans and 5.6% for our non-U.S. pension plans. We determine our expected rate of return on plan assets from the plan assets’ historical long-term investment performance, current and future asset allocation, and estimates of future long-term returns by asset class.
Our 2025 expected rate of return on plan assets will be 7.0% for our U.S. pension plans and 6.3% for our non-U.S. pension plans. We determine our expected rate of return on plan assets from the plan assets’ historical long-term investment performance, current and future asset allocation, and estimates of future long-term returns by asset class.
Plans 100-Basis-Point 100-Basis-Point Increase Decrease Increase Decrease Effect of change in discount rate on pension costs $ 9 $ (11) $ (3) $ 3 Effect of change in expected rate of return on plan assets on pension costs (30) 30 (15) 15 Effect of change in discount rate on postretirement costs — — (1) 1 Effect of change in expected rate of return on plan assets on postretirement costs (9) 9 — — Income Taxes: We compute our annual tax rate based on the statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we earn income.
Plans 100-Basis-Point 100-Basis-Point Increase Decrease Increase Decrease Effect of change in discount rate on pension costs $ 8 $ (10) $ (3) $ 3 Effect of change in expected rate of return on plan assets on pension costs (28) 28 (13) 13 Effect of change in discount rate on postretirement costs — — (1) 1 Effect of change in expected rate of return on plan assets on postretirement costs (8) 8 — — Income Taxes: We compute our annual tax rate based on the statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we earn income.
Long-Term Debt: Our long-term debt, including the current portion, was $20.0 billion at December 30, 2023 and $20.1 billion at December 31, 2022.
Long-Term Debt: Our long-term debt, including the current portion, was $19.9 billion at December 28, 2024, $20.0 billion at December 30, 2023, and $20.1 billion at December 31, 2022.
Cash Held by International Subsidiaries: Of the $1.4 billion cash and cash equivalents on our consolidated balance sheet at December 30, 2023, $980 million was held by international subsidiaries. Subsequent to January 1, 2018, we consider the unremitted earnings of certain international subsidiaries that impose local country taxes on dividends to be indefinitely reinvested.
Cash Held by International Subsidiaries: Of the $1.3 billion cash and cash equivalents on our consolidated balance sheet at December 28, 2024, $781 million was held by international subsidiaries. Subsequent to January 1, 2018, we consider the unremitted earnings of certain international subsidiaries that impose local country taxes on dividends to be indefinitely reinvested.
If we had changed the assumptions used to estimate the fair value of our reporting units and brands with 20% or less excess fair value over carrying amount, as of the 2023 annual impairment test for each of these reporting units and brands, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of these reporting units and brands (in billions): Discount Rate Long-Term Growth Rate Royalty Rate 50-Basis-Point 25-Basis-Point 100-Basis-Point Increase Decrease Increase Decrease Increase Decrease Reporting units $ (4.9) $ 5.7 $ 2.4 $ (2.2) Brands (excess earnings method) (1.1) 1.3 0.5 (0.4) Brands (relief from royalty method) (0.2) 0.3 0.1 (0.1) $ 0.3 $ (0.3) Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited.
These estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline. 42 If we had changed the assumptions used to estimate the fair value of our reporting units and brands with 20% or less excess fair value over carrying amount, as a result of the latest test for each of these reporting units and brands, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of these reporting units and brands (in billions): Discount Rate Long-Term Growth Rate Royalty Rate 50-Basis-Point 25-Basis-Point 100-Basis-Point Increase Decrease Increase Decrease Increase Decrease Reporting units $ (4.0) $ 4.7 $ 2.0 $ (1.8) Brands (excess earnings method) (1.0) 1.1 0.4 $ (0.4) Brands (relief from royalty method) (0.2) 0.3 0.1 (0.1) $ 0.3 $ (0.3) Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited.
Substantially all of the Parent Guarantor’s operations are conducted through its subsidiaries. The Parent Guarantor’s other subsidiaries are separate legal entities that have no obligation to pay any amounts due under the KHFC Senior Notes or to make any funds available therefor, whether by dividends, loans, or other payments.
The Parent Guarantor’s other subsidiaries are separate legal entities that have no obligation to pay any amounts due under the KHFC Senior Notes or to make any funds available therefor, whether by dividends, loans, or other payments.
In addition, we purchase and use significant quantities of resins, fiberboard, metals, and cardboard to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products. We continuously monitor worldwide supply and cost trends of these commodities.
In addition, we purchase and use significant quantities of plastics, cardboard, resin, glass, and metal to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products. We continuously monitor worldwide supply and cost trends of these commodities.
The Guarantee is the Parent Guarantor’s senior unsecured obligation and is: (i) pari passu in right of payment with all of the Parent Guarantor’s existing and future senior indebtedness; (ii) senior in right of payment to all of the Parent Guarantor’s future subordinated indebtedness; (iii) effectively subordinated to all of the Parent Guarantor’s existing and future secured indebtedness to the extent of the value of the assets secured by that indebtedness; and (iv) effectively subordinated to all existing and future indebtedness and other liabilities of the Parent Guarantor’s subsidiaries. 35 The KHFC Senior Notes are obligations exclusively of KHFC and the Parent Guarantor and not of any of the Parent Guarantor’s other subsidiaries.
The Guarantee is the Parent Guarantor’s senior unsecured obligation and is: (i) pari passu in right of payment with all of the Parent Guarantor’s existing and future senior indebtedness; (ii) senior in right of payment to all of the Parent Guarantor’s future subordinated indebtedness; (iii) effectively subordinated to all of the Parent Guarantor’s existing and future secured indebtedness to the extent of the value of the assets secured by that indebtedness; and (iv) effectively subordinated to all existing and future indebtedness and other liabilities of the Parent Guarantor’s subsidiaries.
We also incur market research costs, which are recorded in SG&A but are excluded from advertising expenses. Goodwill and Intangible Assets: 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.
We also incur market research costs, which are recorded in SG&A but are excluded from advertising expenses. Goodwill and Intangible Assets: 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.
Our reporting units that have less than 5% excess fair value over carrying amount as of the 2023 annual impairment test are considered at a heightened risk of future impairments and include our TMA, Continental Europe, and CNAC reporting units, which had an aggregate goodwill carrying amount of $15.9 billion.
Our reporting units that have less than 5% excess fair value over carrying amount as of the 2024 annual impairment test are considered at a heightened risk of future impairments and include our TMS, Continental Europe, and AFH reporting units, which had an aggregate goodwill carrying amount of $19.0 billion.
Although the remaining brands, with a carrying amount of $15.7 billion, have more than 50% excess fair value over carrying amount as of the 2023 annual impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
Although the remaining brands, with a carrying amount of $16.9 billion, have more than 50% excess fair value over carrying amount as of the latest test for each brand, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
(f) Gross expenses/(income) included in other losses/(gains) related to acquisitions and divestitures were income of $38 million ($29 million after-tax) in 2022 and were recorded in other expense/(income). (g) Gross expenses included in nonmonetary currency devaluation were $28 million ($28 million after-tax) in 2023 and $17 million ($17 million after-tax) in 2022 and were recorded in other expense/(income).
(f) Gross expenses/(income) included in other losses/(gains) related to acquisitions and divestitures were income of $38 million ($29 million after-tax) in 2022 and were recorded in other expense/(income).
This change was primarily driven by a $67 million net pension and postretirement non-service costs in 2023 compared to a $135 million net pension and postretirement non-service benefit in 2022 due in part to the settlement of one of our U.K. defined benefit pension plans, which resulted in pre-tax losses of $162 million.
This change was primarily driven by $202 million of unfavorable changes in net pension and postretirement non-service cost/(benefit) due, in part, to the settlement of one of our U.K. defined benefit pension plans, which resulted in pre-tax losses of $162 million in 2023.
See the Non-GAAP Financial Measures section at the end of this item. Fiscal Year 2023 Compared to Fiscal Year 2022: Net sales decreased 1.0% to $20.1 billion in 2023 compared to $20.3 billion in 2022, including the decrease from lapping a 53rd week of shipments in the prior period (1.7 pp) and the unfavorable impacts of foreign currency (0.3 pp).
Fiscal Year 2023 Compared to Fiscal Year 2022 : Net sales decreased 1.0% to $20.1 billion in 2023 compared to $20.3 billion in 2022, including the decrease from lapping a 53rd week of shipments in the prior period (1.7 pp) and the unfavorable impacts of foreign currency (0.3 pp).
Organic Net Sales increased 3.4% to $26.8 billion in 2023 compared to $25.9 billion in 2022, primarily driven by higher pricing (8.9 pp), which more than offset unfavorable volume/mix (5.5 pp). Pricing was higher in both segments, while volume/mix was unfavorable in both segments.
Organic Net Sales increased 3.4% to $26.8 billion in 2023 compared to $25.9 billion in 2022, primarily driven by higher pricing (8.9 pp), which more than offset unfavorable volume/mix (5.5 pp). Pricing was higher in all segments. Volume/mix in North America and International Developed Markets was unfavorable, while volume/mix in Emerging Markets was favorable.
Net Income/(Loss): December 30, 2023 December 31, 2022 % Change (in millions) Operating income/(loss) $ 4,572 $ 3,634 25.8 % Net income/(loss) 2,846 2,368 20.2 % Net income/(loss) attributable to common shareholders 2,855 2,363 20.8 % Adjusted EBITDA (a) 6,307 6,003 5.1 % (a) Adjusted EBITDA is a non-GAAP financial measure.
Net Income/(Loss): December 28, 2024 December 30, 2023 % Change December 30, 2023 December 31, 2022 % Change (in millions) (in millions) Operating income/(loss) $ 1,683 $ 4,572 (63.2) % $ 4,572 $ 3,634 25.8 % Net income/(loss) 2,746 2,846 (3.5) % 2,846 2,368 20.2 % Net income/(loss) attributable to common shareholders 2,744 2,855 (3.9) % 2,855 2,363 20.8 % Adjusted Operating Income (a) 5,360 5,297 1.2 % 5,297 4,989 6.2 % (a) Adjusted Operating Income is a non-GAAP financial measure.
We intend to use our cash on hand and commercial paper programs for daily funding requirements. 32 Acquisitions and Divestitures: In the first quarter of 2022, we acquired 85% of the shares of Just Spices GmbH (“Just Spices”), a German-based company focused on direct-to-consumer sales of premium spice blends, from certain third-party shareholders (the “Just Spices Acquisition”) for cash consideration of approximately $243 million.
In the first quarter of 2022, we acquired 85% of the shares of Just Spices GmbH (“Just Spices”), a German-based company focused on direct-to-consumer sales of premium spice blends, from certain third-party shareholders (the “Just Spices Acquisition”) for cash consideration of approximately $243 million.
However, there has been, and we expect that there could continue to be, a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred. Additionally, the pricing actions we have taken have, in some instances, negatively impacted, and could continue to negatively impact, our market share.
However, there has been, and we expect that there could continue to be, a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred.
Net Cash Provided by/Used for Financing Activities: Net cash used for financing activities was $2.7 billion for the year ended December 30, 2023 compared to $3.7 billion for the year ended December 31, 2022.
We had 2023 capital expenditures of $1.0 billion compared to 2022 capital expenditures of $916 million. Net Cash Provided by/Used for Financing Activities: Net cash used for financing activities was $2.7 billion for the year ended December 30, 2023 compared to $3.7 billion for the year ended December 31, 2022.
While we do not anticipate further changes in the 2024 assumptions for our U.S. and non-U.S. pension and postretirement benefit plans, as a sensitivity measure, a 100-basis-point change in our discount rate or a 100-basis-point change in the expected rate of return on plan assets would have the following effects, increase/(decrease) in cost (in millions): U.S. Plans Non-U.S.
We attempt to maintain our target asset allocation by re-balancing between asset classes as we make contributions and monthly benefit payments. 43 While we do not anticipate further changes in the 2025 assumptions for our U.S. and non-U.S. pension and postretirement benefit plans, as a sensitivity measure, a 100-basis-point change in our discount rate or a 100-basis-point change in the expected rate of return on plan assets would have the following effects, increase/(decrease) in cost (in millions): U.S.
(h) Gross expenses/(income) included in debt prepayment and extinguishment (benefit)/costs were income of $38 million ($35 million after-tax) in 2022 and were recorded in interest expense. (i) Certain significant discrete income tax items were a benefit of $17 million in 2023. The benefit represents the reversal of uncertain tax position reserves related to the U.S.
(h) Gross expenses/(income) included in debt prepayment and extinguishment (benefit)/costs were income of $38 million ($35 million after-tax) in 2022 and were recorded in interest expense. (i) Certain significant discrete income tax items were a benefit of $2.2 billion in 2024 and $17 million in 2023.
Our 2023 fiscal year was a 52-week period that ended on December 30, 2023.
Our 2024 fiscal year was a 52-week period that ended on December 28, 2024, our 2023 fiscal year was a 52-week period that ended on December 30, 2023, and our 2022 fiscal year was a 53-week period that ended on December 31, 2022.
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 and 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.
These impacts more than offset higher commodity costs, including the impact of realized and unrealized gains and losses on commodity hedges; higher supply chain costs, reflecting inflationary pressure in manufacturing and procurement costs; unfavorable volume/mix; increased selling, general and administrative expenses (“SG&A”), particularly advertising expenses; and the decrease from lapping a 53rd week of shipments in the prior period.
These favorable impacts to operating income/(loss) were partially offset by higher commodity costs, including the impact of realized and unrealized gains and losses on commodity hedges, higher supply chain costs, reflecting inflationary pressure in manufacturing and procurement costs, unfavorable volume/mix, increased SG&A primarily for advertising expenses, and the decrease from lapping a 53rd week of shipments in the prior period.
Drivers of the changes in net sales and Organic Net Sales were: Net Sales Currency Acquisitions and Divestitures 53rd Week Organic Net Sales Price Volume/Mix 2023 Compared to 2022 North America (1.0) % (0.3) pp 0.0 pp (1.7) pp 1.0 % 7.5 pp (6.5) pp International 6.0 % (3.2) pp (0.5) pp (1.8) pp 11.5 % 13.6 pp (2.1) pp Kraft Heinz 0.6 % (0.9) pp (0.1) pp (1.8) pp 3.4 % 8.9 pp (5.5) pp Adjusted EBITDA: December 30, 2023 December 31, 2022 (in millions) Segment Adjusted EBITDA: North America $ 5,603 $ 5,284 International 1,094 1,017 General corporate expenses (390) (298) Depreciation and amortization (excluding restructuring activities) (923) (922) Divestiture-related license income 54 56 Restructuring activities (60) (74) Deal costs — (9) Unrealized gains/(losses) on commodity hedges (1) (63) Impairment losses (662) (999) Certain non-ordinary course legal and regulatory matters (2) (210) Equity award compensation expense (141) (148) Operating income/(loss) 4,572 3,634 Interest expense 912 921 Other expense/(income) 27 (253) Income/(loss) before income taxes $ 3,633 $ 2,966 31 North America: 2023 Compared to 2022 December 30, 2023 December 31, 2022 % Change (in millions) Net sales $ 20,126 $ 20,340 (1.0) % Organic Net Sales (a) 20,191 19,983 1.0 % Segment Adjusted EBITDA 5,603 5,284 6.0 % (a) Organic Net Sales is a non-GAAP financial measure.
Drivers of the changes in net sales and Organic Net Sales were: Net Sales Currency Acquisitions and Divestitures 53rd Week Organic Net Sales Price Volume/Mix 2024 Compared to 2023 North America (2.9) % (0.1) pp 0.0 pp 0.0 pp (2.8) % 1.4 pp (4.2) pp International Developed Markets (2.4) % 0.4 pp 0.0 pp 0.0 pp (2.8) % 0.0 pp (2.8) pp Emerging Markets (4.3) % (6.2) pp (2.1) pp 0.0 pp 4.0 % 3.5 pp 0.5 pp Kraft Heinz (3.0) % (0.7) pp (0.2) pp 0.0 pp (2.1) % 1.4 pp (3.5) pp 2023 Compared to 2022 North America (1.0) % (0.3) pp 0.0 pp (1.7) pp 1.0 % 7.5 pp (6.5) pp International Developed Markets 6.5 % (0.5) pp (0.7) pp (1.8) pp 9.5 % 15.6 pp (6.1) pp Emerging Markets 5.4 % (6.6) pp (0.2) pp (1.7) pp 13.9 % 10.9 pp 3.0 pp Kraft Heinz 0.6 % (0.9) pp (0.1) pp (1.8) pp 3.4 % 8.9 pp (5.5) pp 32 Adjusted Operating Income: December 28, 2024 December 30, 2023 December 31, 2022 (in millions) Segment Adjusted Operating Income: North America $ 5,111 $ 5,050 $ 4,735 International Developed Markets 537 522 522 Emerging Markets 321 376 319 General corporate expenses (609) (651) (587) Restructuring activities (27) (60) (74) Deal costs — — (9) Unrealized gains/(losses) on commodity hedges 19 (1) (63) Impairment losses (3,669) (662) (999) Certain non-ordinary course legal and regulatory matters — (2) (210) Operating income/(loss) 1,683 4,572 3,634 Interest expense 912 912 921 Other expense/(income) (85) 27 (253) Income/(loss) before income taxes $ 856 $ 3,633 $ 2,966 North America: 2024 Compared to 2023 2023 Compared to 2022 December 28, 2024 December 30, 2023 % Change December 30, 2023 December 31, 2022 % Change (in millions) (in millions) Net sales $ 19,543 $ 20,126 (2.9) % $ 20,126 $ 20,340 (1.0) % Organic Net Sales (a) 19,570 20,126 (2.8) % 20,191 19,983 1.0 % Segment Adjusted Operating Income 5,111 5,050 1.2 % 5,050 4,735 6.7 % (a) Organic Net Sales is a non-GAAP financial measure.
Under highly inflationary accounting, the financial statements of a subsidiary are remeasured into our reporting currency (U.S. dollars) based on the legally available exchange rate at which we expect to settle the underlying transactions.
We have reflected this change from Segment Adjusted EBITDA to Segment Adjusted Operating Income in all historical periods presented. 31 Under highly inflationary accounting, the financial statements of a subsidiary are remeasured into our reporting currency (U.S. dollars) based on the legally available exchange rate at which we expect to settle the underlying transactions.
See the Non-GAAP Financial Measures section at the end of this item. 29 Fiscal Year 2023 Compared to Fiscal Year 2022: Diluted EPS increased 20.9% to $2.31 in 2023 compared to $1.91 in 2022, primarily driven by the net income/(loss) factors discussed above.
See the Non-GAAP Financial Measures section at the end of this item. 29 Fiscal Year 2024 Compared to Fiscal Year 2023: Diluted EPS decreased 2.2% to $2.26 in 2024 compared to $2.31 in 2023, primarily driven by the net income/(loss) factors discussed above and the favorable impact of our common stock repurchases.
Organic Net Sales increased 11.5% to $6.6 billion in 2023 compared to $5.9 billion in 2022, driven by higher pricing (13.6 pp), which more than offset unfavorable volume/mix (2.1 pp). Higher pricing included increases across markets primarily to mitigate higher input costs.
Organic Net Sales increased 9.5% to $3.6 billion in 2023 compared to $3.3 billion in 2022 driven by higher pricing (15.6 pp), which more than offset unfavorable volume/mix (6.1 pp). Higher pricing included increases across markets primarily to mitigate higher input costs. Unfavorable volume/mix was primarily due to the elasticity impacts from pricing actions, particularly in our Northern Europe region.
Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $38.5 billion as of December 30, 2023. 37 We test our reporting units and brands for impairment annually as of the first day of our third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount.
We test our reporting units and brands for impairment annually as of the first day of our third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount.
Supplemental Guarantor Information: The Kraft Heinz Company (as the “Parent Guarantor”) fully and unconditionally guarantees all the senior unsecured registered notes (collectively, the “KHFC Senior Notes”) issued by KHFC, our 100% owned operating subsidiary (the “Guarantee”). See Note 16, Debt , in Item 8, Financial Statements and Supplementary Data , for additional descriptions of these guarantees.
Supplemental Guarantor Information: The Kraft Heinz Company (as the “Parent Guarantor”) fully and unconditionally guarantees all the senior unsecured registered notes (collectively, the “KHFC Senior Notes”) issued by KHFC, our 100% owned operating subsidiary (the “Guarantee”).
Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from zero 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. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted.
The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period but is not expected to be material to our financial position. 40 New Accounting Pronouncements See Note 3, New Accounting Standards , in Item 8, Financial Statements and Supplementary Data , for a discussion of new accounting pronouncements.
The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period but is not expected to be material to our financial position.
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 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.
Our 2024 discount rate assumption will be 5.4% for service cost and 5.2% for interest cost for our U.S. pension plans and 5.1% for service cost and 4.7% for interest cost for our non-U.S. pension plans.
Our 2025 discount rate assumption will be 6.0% for service cost and 5.5% for interest cost for our U.S. pension plans and 5.9% for service cost and 5.3% for interest cost for our non-U.S. pension plans.
Our Asia reporting unit had between 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $309 million as of the 2023 annual impairment test.
Our Hydration & Desserts (“HD”) and Asia reporting units had between 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $4.6 billion as of the 2024 annual impairment test.
Items Affecting Comparability of Financial Results Impairment Losses: Our results of operations reflect goodwill impairment losses of $510 million and intangible asset impairment losses of $152 million in 2023 compared to goodwill impairment losses of $444 million, intangible asset impairment losses of $469 million, and net property, plant, and equipment asset impairment losses of $86 million in 2022.
We recognized goodwill impairment losses of $510 million and intangible asset impairment losses of $152 million in 2023. We recognized goodwill impairment losses of $444 million, intangible asset impairment losses of $469 million, and net property, and plant, and equipment asset impairment losses of $86 million in 2022.
Equity and Dividends: We paid dividends on our common stock of $2.0 billion in 2023, 2022, and 2021. Additionally, in the first quarter of 2024, our Board declared a cash dividend of $0.40 per share of common stock, which is payable on March 29, 2024 to stockholders of record on March 8, 2024.
Additionally, in the first quarter of 2025, our Board declared a cash dividend of $0.40 per share of common stock, which is payable on March 28, 2025 to stockholders of record on March 7, 2025.
To supplement the consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Organic Net Sales, Adjusted EBITDA, and Adjusted EPS, which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way.
GAAP. 44 To supplement the consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Organic Net Sales, Adjusted Operating Income, and Adjusted EPS, which are considered non-GAAP financial measures.
Under our U.S. 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 December 30, 2023 and $198 million during the year ended December 31, 2022.

… 128 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed10 unchanged
Biggest changeEffect of Hypothetical 10% Fluctuation in Market Prices: The potential gain or loss on the fair value of our outstanding commodity contracts, foreign exchange contracts, and cross-currency swap contracts, assuming a hypothetical 10% fluctuation in commodity prices and foreign currency exchange rates, would have been (in millions): December 30, 2023 December 31, 2022 Commodity contracts $ 77 $ 94 Foreign currency contracts 37 71 Cross-currency swap contracts 115 211 It should be noted that any change in the fair value of our derivative contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items.
Biggest changeEffect of Hypothetical 10% Fluctuation in Market Prices: The potential gain or loss on the fair value of our outstanding commodity contracts, foreign exchange contracts, and cross-currency swap contracts, assuming a hypothetical 10% fluctuation in commodity prices and foreign currency exchange rates, would have been (in millions): December 28, 2024 December 30, 2023 Commodity contracts $ 81 $ 77 Foreign currency contracts 165 37 Cross-currency swap contracts 71 115 It should be noted that any change in the fair value of our derivative contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items.
Effect of Hypothetical 1% Fluctuation in EURIBOR: Based on our current variable rate debt balance as of December 30, 2023, a hypothetical 1% increase in EURIBOR would have an insignificant impact on our annual interest expense. 45
Effect of Hypothetical 1% Fluctuation in EURIBOR: Based on our current variable rate debt balance as of December 28, 2024, a hypothetical 1% increase in EURIBOR would have an insignificant impact on our annual interest expense. 50

Other KHC 10-K year-over-year comparisons