UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
For the quarterly period ended September 26, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
For the transition period from __________ to __________
Commission File Number: 001-37482
The Kraft Heinz Company
(Exact name of registrant as specified in its charter)
| Delaware | 46-2078182 | |||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| One PPG Place, | Pittsburgh, | Pennsylvania | 15222 | |||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(412) 456-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common stock, $0.01 par value | KHC | New York Stock Exchange | ||||||
3.500% Senior Notes due 2029 | KHC29 | The Nasdaq Stock Market LLC | ||||||
3.500% Senior Notes due 2031 | KHC31 | The Nasdaq Stock Market LLC | ||||||
3.250% Senior Notes due 2033 | KHC33 | The Nasdaq Stock Market LLC | ||||||
| 3.950% Senior Notes due 2034 | KHC34 | The Nasdaq Stock Market LLC | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 31, 2026, there were 1,183,828,946 shares of the registrant’s common stock outstanding.
Table of Contents
Unless the context otherwise requires, the terms “we,” “us,” “our,” “Kraft Heinz,” and the “Company” each refer to The Kraft Heinz Company and all of its consolidated subsidiaries.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains a number of forward-looking statements. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “plan,” “will,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding our plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, and dividends, as well as statements regarding the previously announced separation of Kraft Heinz into two independent publicly traded companies, including the timing and structure of such separation, the pause of work related to the separation, the ability to effect the separation and to meet the condition thereto, the characteristics of the separated businesses and the expected benefits of the separation if completed. These forward-looking statements reflect management’s current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond our control.
Important factors that may affect our business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, operating in a highly competitive industry; 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; changes in the retail landscape or the loss of key retail customers; changes in our relationships with significant customers or suppliers, or in other business relationships; our ability to maintain, extend, and expand our reputation and brand image; our ability to effect the previously announced separation of Kraft Heinz into two independent publicly traded companies and to meet the conditions related thereto, including obtaining applicable regulatory approvals, if work related to the separation is resumed; negative effects of the announcement pendency of the separation, including the current pause on work related to the separation, on the market price of Kraft Heinz’s securities and/or on Kraft Heinz’s financial performance; our ability to leverage our brand value to compete against private label products; our ability 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; product recalls or other product liability claims; weather or environmental conditions and trends, including the impacts from and responses to climate change; our ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; our ability to successfully execute our strategic initiatives; the impacts of our international operations; our ability to protect intellectual property rights; our ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve our competitiveness; the influence of our largest stockholder; our level of indebtedness, as well as our ability to comply with covenants under our debt instruments; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; compliance with laws and regulations and related legal claims or regulatory enforcement actions; failure to maintain an effective system of internal controls; a downgrade in our credit rating; the impact of sales of our common stock in the public market; the impact of our share repurchases or any change in our share repurchase activity; our ability to continue to pay a regular dividend and the amounts of any such dividends; disruptions in the global economy caused by geopolitical conflicts (including the ongoing conflicts in the Middle East), unanticipated business disruptions and natural events in the locations in which we or our customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and various other nations where we do business (including inflationary pressures, the imposition of increased or new tariffs or other trade restrictions, instability in financial institutions, general economic slowdown, recession, or a potential U.S. federal government shutdown); changes in our management team or other key personnel and our ability to hire or retain key personnel or a highly skilled and diverse global workforce; our dependence on information technology and systems, including service interruptions, misappropriation of data, or breaches of security; increased pension, labor, and people-related expenses; changes in tax laws and interpretations and the final determination of tax audits, including transfer pricing matters, and any related litigation; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect our forward-looking statements, see Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 27, 2025. We disclaim and do not undertake any obligation to update, revise, or withdraw any forward-looking statement in this report, except as required by applicable law or regulation.
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. We encourage you to follow our investor relations website in addition to our filings with the Securities and Exchange Commission (“SEC”) to receive timely information about the Company. The information on our website is not part of this Quarterly Report on Form 10-Q and shall not be deemed to be incorporated by reference into this report or any other filings we make with the SEC.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Kraft Heinz Company
Condensed Consolidated Statements of Income
(in millions, except per share data)
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net sales | $ | 6,115 | $ | 6,237 | $ | 18,424 | $ | 18,588 | |||||||||||||||
| Cost of products sold | 4,127 | 4,247 | 12,189 | 12,351 | |||||||||||||||||||
| Gross profit | 1,988 | 1,990 | 6,235 | 6,237 | |||||||||||||||||||
| Selling, general and administrative expenses, excluding impairment losses | 1,041 | 930 | 3,209 | 2,689 | |||||||||||||||||||
| Goodwill impairment losses | 69 | 35 | 2,510 | 6,729 | |||||||||||||||||||
| Intangible asset impairment losses | 3 | — | 4,927 | 2,572 | |||||||||||||||||||
| Selling, general and administrative expenses | 1,113 | 965 | 10,646 | 11,990 | |||||||||||||||||||
| Operating income/(loss) | 875 | 1,025 | (4,411) | (5,753) | |||||||||||||||||||
| Interest expense/(income) | 210 | 240 | 415 | 709 | |||||||||||||||||||
| Other expense/(income) | (39) | (22) | (164) | (120) | |||||||||||||||||||
| Income/(loss) before income taxes | 704 | 807 | (4,662) | (6,342) | |||||||||||||||||||
| Provision for/(benefit from) income taxes | 168 | 194 | (537) | 154 | |||||||||||||||||||
| Net income/(loss) | 536 | 613 | (4,125) | (6,496) | |||||||||||||||||||
| Net income/(loss) attributable to noncontrolling interest | (8) | (2) | (7) | 1 | |||||||||||||||||||
| Net income/(loss) attributable to common shareholders | $ | 544 | $ | 615 | $ | (4,118) | $ | (6,497) | |||||||||||||||
| Per share data applicable to common shareholders: | |||||||||||||||||||||||
| Basic earnings/(loss) | $ | 0.46 | $ | 0.52 | $ | (3.47) | $ | (5.47) | |||||||||||||||
| Diluted earnings/(loss) | 0.46 | 0.52 | (3.47) | (5.47) | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
1
The Kraft Heinz Company
Condensed Consolidated Statements of Comprehensive Income
(in millions)
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net income/(loss) | $ | 536 | $ | 613 | $ | (4,125) | $ | (6,496) | |||||||||||||||
| Other comprehensive income/(loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | 5 | (77) | (162) | 904 | |||||||||||||||||||
| Net deferred gains/(losses) on net investment hedges | (17) | 10 | 79 | (289) | |||||||||||||||||||
| Amounts excluded from the effectiveness assessment of net investment hedges | 5 | 7 | 19 | 24 | |||||||||||||||||||
| Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) | (6) | (6) | (18) | (25) | |||||||||||||||||||
| Net deferred gains/(losses) on cash flow hedges | — | 11 | 9 | 117 | |||||||||||||||||||
| Amounts excluded from the effectiveness assessment of cash flow hedges | — | — | (2) | (1) | |||||||||||||||||||
| Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) | 1 | 5 | 6 | (173) | |||||||||||||||||||
| Amounts excluded from the effectiveness assessment of fair value hedges | 2 | 12 | 12 | 24 | |||||||||||||||||||
| Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) | (1) | (2) | (10) | (3) | |||||||||||||||||||
| Net deferred gains/(losses) on available-for-sale debt securities | — | 1 | — | — | |||||||||||||||||||
| Net actuarial gains/(losses) arising during the period | (54) | (27) | (51) | (60) | |||||||||||||||||||
| Net postemployment benefit losses/(gains) reclassified to net income/(loss) | (3) | (3) | (44) | (3) | |||||||||||||||||||
| Total other comprehensive income/(loss) | (68) | (69) | (162) | 515 | |||||||||||||||||||
| Total comprehensive income/(loss) | 468 | 544 | (4,287) | (5,981) | |||||||||||||||||||
| Comprehensive income/(loss) attributable to noncontrolling interest | (8) | (6) | (13) | (15) | |||||||||||||||||||
| Comprehensive income/(loss) attributable to common shareholders | $ | 476 | $ | 550 | $ | (4,274) | $ | (5,966) | |||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
2
The Kraft Heinz Company
Condensed Consolidated Balance Sheets
(in millions, except per share data)
(Unaudited)
| September 26, 2026 | December 27, 2025 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 1,888 | $ | 2,615 | |||||||
Trade receivables (net of allowances of $30 at September 26, 2026 and $34 at December 27, 2025) | 2,211 | 2,254 | |||||||||
| Inventories | 3,415 | 3,167 | |||||||||
| Prepaid expenses | 276 | 291 | |||||||||
| Marketable securities | 16 | 1,060 | |||||||||
| Other current assets | 841 | 588 | |||||||||
| Assets held for sale | 16 | 152 | |||||||||
| Total current assets | 8,663 | 10,127 | |||||||||
| Property, plant and equipment, net | 7,179 | 7,318 | |||||||||
| Goodwill | 19,649 | 22,179 | |||||||||
| Intangible assets, net | 32,328 | 37,529 | |||||||||
| Other non-current assets | 4,409 | 4,633 | |||||||||
| TOTAL ASSETS | $ | 72,228 | $ | 81,786 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current portion of long-term debt | $ | 918 | $ | 1,908 | |||||||
| Accounts payable | 4,784 | 4,308 | |||||||||
| Accrued marketing | 902 | 801 | |||||||||
| Interest payable | 241 | 298 | |||||||||
| Other current liabilities | 1,647 | 1,455 | |||||||||
| Liabilities held for sale | — | 8 | |||||||||
| Total current liabilities | 8,492 | 8,778 | |||||||||
| Long-term debt | 17,085 | 19,311 | |||||||||
| Deferred income taxes | 7,810 | 9,022 | |||||||||
| Accrued postemployment costs | 128 | 131 | |||||||||
| Long-term deferred income | 1,278 | 1,321 | |||||||||
| Other non-current liabilities | 1,345 | 1,434 | |||||||||
| TOTAL LIABILITIES | 36,138 | 39,997 | |||||||||
| Commitments and Contingencies (Note 14) | |||||||||||
| Redeemable noncontrolling interest | 13 | 12 | |||||||||
| Equity: | |||||||||||
Common stock, $0.01 par value (5,000 shares authorized; 1,260 shares issued and 1,184 shares outstanding at September 26, 2026; 1,257 shares issued and 1,184 shares outstanding at December 27, 2025) | 12 | 12 | |||||||||
| Additional paid-in capital | 49,937 | 51,287 | |||||||||
| Retained earnings/(deficit) | (8,747) | (4,629) | |||||||||
| Accumulated other comprehensive income/(losses) | (2,526) | (2,370) | |||||||||
Treasury stock, at cost (76 shares at September 26, 2026 and 73 shares at December 27, 2025) | (2,701) | (2,636) | |||||||||
| Total shareholders’ equity | 35,975 | 41,664 | |||||||||
| Noncontrolling interest | 102 | 113 | |||||||||
| TOTAL EQUITY | 36,077 | 41,777 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 72,228 | $ | 81,786 | |||||||
See accompanying notes to the condensed consolidated financial statements.
3
The Kraft Heinz Company
Condensed Consolidated Statements of Equity
(in millions)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings/(Deficit) | Accumulated Other Comprehensive Income/(Losses) | Treasury Stock, at Cost | Noncontrolling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 27, 2025 | $ | 12 | $ | 51,287 | $ | (4,629) | $ | (2,370) | $ | (2,636) | $ | 113 | $ | 41,777 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | 798 | — | — | 1 | 799 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | (78) | — | (1) | (79) | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | (477) | — | — | — | — | (477) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 28 | — | — | (12) | — | 16 | ||||||||||||||||||||||||||||||||||
| Balance at March 28, 2026 | $ | 12 | $ | 50,838 | $ | (3,831) | $ | (2,448) | $ | (2,648) | $ | 113 | $ | 42,036 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | (5,460) | — | — | — | (5,460) | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | (10) | — | (3) | (13) | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | (477) | — | — | — | — | (477) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 31 | — | — | (1) | 1 | 31 | ||||||||||||||||||||||||||||||||||
| Balance at June 27, 2026 | $ | 12 | $ | 50,392 | $ | (9,291) | $ | (2,458) | $ | (2,649) | $ | 111 | $ | 36,117 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | 544 | — | — | (8) | 536 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | (68) | — | (1) | (69) | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | (477) | — | — | — | — | (477) | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | — | (52) | — | (52) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 22 | — | — | — | — | 22 | ||||||||||||||||||||||||||||||||||
| Balance at September 26, 2026 | $ | 12 | $ | 49,937 | $ | (8,747) | $ | (2,526) | $ | (2,701) | $ | 102 | $ | 36,077 | |||||||||||||||||||||||||||
4
| Common Stock | Additional Paid-in Capital | Retained Earnings/(Deficit) | Accumulated Other Comprehensive Income/(Losses) | Treasury Stock, at Cost | Noncontrolling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 28, 2024 | $ | 12 | $ | 52,135 | $ | 2,171 | $ | (2,915) | $ | (2,218) | $ | 134 | $ | 49,319 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | 712 | — | — | 2 | 714 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | 222 | — | (1) | 221 | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | — | (479) | — | — | — | (479) | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | — | (214) | — | (214) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 34 | — | — | — | 3 | 37 | ||||||||||||||||||||||||||||||||||
| Balance at March 29, 2025 | $ | 12 | $ | 52,169 | $ | 2,404 | $ | (2,693) | $ | (2,432) | $ | 138 | $ | 49,598 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | (7,824) | — | — | 1 | (7,823) | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | 374 | — | (13) | 361 | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | — | (475) | — | — | — | (475) | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | — | (188) | — | (188) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 27 | — | — | (16) | 1 | 12 | ||||||||||||||||||||||||||||||||||
| Balance at June 28, 2025 | $ | 12 | $ | 52,196 | $ | (5,895) | $ | (2,319) | $ | (2,636) | $ | 127 | $ | 41,485 | |||||||||||||||||||||||||||
| Net income/(loss) excluding redeemable noncontrolling interest | — | — | 615 | — | — | (2) | 613 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) excluding redeemable noncontrolling interest | — | — | — | (65) | — | (3) | (68) | ||||||||||||||||||||||||||||||||||
Dividends declared-common stock ($0.40 per share) | — | (476) | — | — | — | — | (476) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options, issuance of other stock awards, and other | — | 18 | — | — | — | — | 18 | ||||||||||||||||||||||||||||||||||
| Balance at September 27, 2025 | $ | 12 | $ | 51,738 | $ | (5,280) | $ | (2,384) | $ | (2,636) | $ | 122 | $ | 41,572 | |||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
5
The Kraft Heinz Company
Condensed Consolidated Statements of Cash Flows
(in millions)
(Unaudited)
| For the Nine Months Ended | |||||||||||
| September 26, 2026 | September 27, 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income/(loss) | $ | (4,125) | $ | (6,496) | |||||||
| Adjustments to reconcile net income/(loss) to operating cash flows: | |||||||||||
| Depreciation and amortization | 768 | 717 | |||||||||
| Divestiture-related license income | (39) | (39) | |||||||||
| Equity award compensation expense | 76 | 70 | |||||||||
| Deferred income tax provision/(benefit) | (1,159) | (488) | |||||||||
| Postemployment benefit plan contributions | (11) | (11) | |||||||||
| Goodwill and intangible asset impairment losses | 7,437 | 9,301 | |||||||||
| Nonmonetary currency devaluation | 34 | 26 | |||||||||
| Loss/(gain) on sale of business | (1) | 44 | |||||||||
| Loss/(gain) on extinguishment of debt | (264) | — | |||||||||
| Other items, net | (149) | 13 | |||||||||
| Changes in current assets and liabilities: | |||||||||||
| Trade receivables | 14 | (53) | |||||||||
| Inventories | (366) | (205) | |||||||||
| Accounts payable | 618 | 312 | |||||||||
| Other current assets | (149) | (188) | |||||||||
| Other current liabilities | 276 | 83 | |||||||||
| Net cash provided by/(used for) operating activities | 2,960 | 3,086 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | (599) | (596) | |||||||||
| Purchases of marketable securities | (105) | (1,358) | |||||||||
| Proceeds from sale of marketable securities | 1,157 | 354 | |||||||||
| Proceeds from sale of business, net of cash disposed and working capital adjustments | 146 | 9 | |||||||||
| Other investing activities, net | 52 | (19) | |||||||||
| Net cash provided by/(used for) investing activities | 651 | (1,610) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Repayments of long-term debt | (3,982) | (677) | |||||||||
| Proceeds from issuance of long-term debt | 1,152 | 1,620 | |||||||||
| Dividends paid | (1,423) | (1,424) | |||||||||
| Repurchases of common stock | (79) | (435) | |||||||||
| Other financing activities, net | (89) | 153 | |||||||||
| Net cash provided by/(used for) financing activities | (4,421) | (763) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (24) | 52 | |||||||||
| Cash, cash equivalents, and restricted cash | |||||||||||
| Net increase/(decrease) | (834) | 765 | |||||||||
| Balance at beginning of period | 2,944 | 1,486 | |||||||||
| Balance at end of period | $ | 2,110 | $ | 2,251 | |||||||
See accompanying notes to the condensed consolidated financial statements.
6
The Kraft Heinz Company
Notes to Condensed Consolidated Financial Statements
Note 1. Basis of Presentation
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted, in accordance with the rules of the SEC. In management’s opinion, these interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary to fairly state our results for the periods presented.
We operate on a 52- or 53-week fiscal year ending on the last Saturday in December in each calendar year. Unless the context requires otherwise, references to years and quarters contained herein pertain to our fiscal years and fiscal quarters. Our 2026 fiscal year is scheduled to be a 52-week period ending on December 26, 2026, and our 2025 fiscal year was a 52-week period that ended on December 27, 2025.
The condensed consolidated balance sheet data at December 27, 2025 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These statements should be read in conjunction with our audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 27, 2025. The results for interim periods are not necessarily indicative of future or annual results.
Principles of Consolidation
The condensed consolidated financial statements include The Kraft Heinz Company and all of our controlled subsidiaries. All intercompany transactions are eliminated.
Reportable Segments
In the third quarter of 2026, our internal reporting structure and reportable segments changed. We combined our West and East Emerging Markets (“WEEM”) and Asia Emerging Markets (“AEM”) operating segments to form the Emerging Markets operating segment in order to increase efficiencies and drive sustainable growth across our global business. In conjunction with the creation of the Emerging Markets operating segment, we moved certain European countries within the WEEM operating segment into the Europe and Pacific Developed Markets operating segment. Subsequently, we manage our operating results through three operating segments, all of which are reportable segments: North America, Europe and Pacific Developed Markets, and Emerging Markets. We have reflected this segment change in all periods presented.
Use of Estimates
We prepare our condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make accounting policy elections, estimates, and assumptions that affect the reported amount of assets, liabilities, reserves, and expenses. These accounting policy elections, estimates, and assumptions are based on our best estimates and judgments. We evaluate our policy elections, estimates, and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates to be reasonable given the current facts available. We adjust our policy elections, estimates, and assumptions when facts and circumstances dictate. Market volatility, including foreign currency exchange rates, increases the uncertainty inherent in our estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our condensed consolidated financial statements.
Reclassifications
We made reclassifications and adjustments to certain previously reported financial information to conform to our current period presentation.
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Held for Sale
In the third quarter of 2026, we concluded that certain assets in the Europe and Pacific Developed Markets segment, primarily relating to manufacturing facilities, met the held for sale criteria. Accordingly, we classified the assets as held for sale in our condensed consolidated balance sheet as of September 26, 2026. We expect any gains related to these held for sale assets to be insignificant. As of December 27, 2025, we classified certain assets and liabilities as held for sale in our condensed consolidated balance sheet, primarily relating to the divestiture of our infant and specialty food business in Italy in our Europe and Pacific Developed Markets segment. See Note 4, Acquisitions and Divestitures, for additional information.
Cash, Cash Equivalents, and Restricted Cash
Cash equivalents include term deposits with banks, money market funds, and all highly liquid investments with original maturities of 90 days or less. The fair value of cash equivalents approximates the carrying amount. Cash and cash equivalents that are legally restricted as to withdrawal or usage are classified in other current assets or other non-current assets, as applicable, on the condensed consolidated balance sheets. At September 26, 2026, we had restricted cash of $146 million recorded in other current assets and restricted cash of $76 million recorded in other non-current assets. At December 27, 2025, we had restricted cash of $164 million recorded in other current assets and restricted cash of $165 million recorded in other non-current assets. Total cash, cash equivalents, and restricted cash was $2,110 million at September 26, 2026, and $2,944 million at December 27, 2025.
Note 2. Significant Accounting Policies
There were no significant changes to our accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 27, 2025.
Note 3. New Accounting Standards
Accounting Standards Not Yet Adopted
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
In November 2024, the FASB issued ASU 2024-03 to improve financial reporting under ASC 220, Income Statement—Reporting Comprehensive Income. The guidance requires entities to disclose additional information about specific expense categories related to cost of sales and SG&A in the notes to financial statements at interim and annual reporting periods. This ASU will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures.
Intangibles—Goodwill and Other—Internal–Use Software (Subtopic 350-40):
In September 2025, the FASB issued ASU 2025-06 to provide clarification and improvements to the accounting for internal-use software costs under ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The guidance includes amendments related to capitalization of implementation costs, subsequent measurement, and related presentation and disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact this ASU will have on our financial statements and related disclosures.
Note 4. Acquisitions and Divestitures
Divestitures
Italy Infant Transaction:
On July 9, 2025, we entered into a definitive agreement with a third party, NewPrinces S.p.A., to sell our infant and specialty food business in Italy, within our Europe and Pacific Developed Markets segment (the “Italy Infant Transaction”). The net assets to be transferred in the Italy Infant Transaction include, among other things, our intellectual property rights to the Plasmon and Nipiol brands and one manufacturing facility in Italy (collectively, the “Italy Infant Disposal Group”).
In the third quarter of 2025, we determined that the Italy Infant Disposal Group met the held for sale criteria. As of July 9, 2025, the date the Italy Infant Disposal Group was determined to be held for sale, we tested the individual assets included within the Italy Infant Disposal Group for impairment. We determined that the net assets of the Italy Infant Disposal Group had an aggregate carrying amount above their estimated fair value less cost to sell, and that the goodwill within the Italy Infant Disposal Group was fully impaired. Accordingly, we recorded a non-cash goodwill impairment loss of $40 million, which was recognized in SG&A, for the year ended December 27, 2025. Further, we recorded an estimated pre-tax loss on sale of business of $47 million for the year ended December 27, 2025, which was recognized in other expense/(income) on our consolidated statements of income. We recognized these costs in the third and fourth quarters of 2025.
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The Italy Infant Transaction closed on December 31, 2025, which was in the first quarter of our fiscal year 2026, for total cash consideration of approximately $146 million. For the three and nine months ended September 26, 2026, we recognized an insignificant adjustment to pre-tax loss on sale of business in other expense/(income) on our condensed consolidated statements of income.
Coffee Transaction:
On November 3, 2026, we entered into a definitive agreement to divest our North America coffee business to an affiliate of One Rock Capital Partners, LLC at an enterprise value of $650 million. The Company will retain a 30% non-controlling equity stake in the business. The transaction is subject to regulatory approval and other customary closing conditions and is expected to close in mid-2027.
Note 5. Restructuring Activities
Restructuring Activities:
We have restructuring programs globally, which are focused primarily on streamlining our organizational design. For the nine months ended September 26, 2026, we eliminated approximately 240 positions related to these programs. As of September 26, 2026, we expect to eliminate approximately 240 positions during the remainder of 2026 related to these programs, primarily outside of North America. For the three months ended September 26, 2026, restructuring activities resulted in a net expense of $7 million, which included a net expense of $5 million of severance and employee benefit costs and a net expense of $2 million of asset-related costs. For the nine months ended September 26, 2026, restructuring activities resulted in a net benefit of $7 million, which included a net benefit of $44 million of other restructuring costs, a net expense of $22 million of asset-related costs, and a net expense of $15 million of severance and employee benefit costs. Other restructuring costs included a non-cash benefit related to the settlement of our U.S. Retiree Life Insurance Plan during the nine months ended September 26, 2026. Restructuring activities resulted in expenses of $4 million for the three months and $18 million for the nine months ended September 27, 2025.
Our net liability balance for restructuring project costs that qualify as exit and disposal costs under U.S. GAAP was (in millions):
| Severance and Employee Benefit Costs | Other Exit Costs | Total | |||||||||||||||
| Balance at December 27, 2025 | $ | 9 | $ | 2 | $ | 11 | |||||||||||
| Charges/(credits) | 15 | — | 15 | ||||||||||||||
| Cash payments | (10) | (1) | (11) | ||||||||||||||
| Balance at September 26, 2026 | $ | 14 | $ | 1 | $ | 15 | |||||||||||
We expect the majority of the liability for severance and employee benefit costs as of September 26, 2026 to be paid by the end of 2026. The liability for other exit costs relates to lease obligations. The cash impact of these obligations will continue for the duration of the lease terms, which expire in 2030.
Total Expenses/(Income):
Total expense/(income) related to restructuring activities, by income statement caption, were (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Severance and employee benefit costs - Cost of products sold | $ | (1) | $ | 2 | $ | 9 | $ | 1 | |||||||||||||||
| Severance and employee benefit costs - SG&A | 6 | 4 | 6 | 8 | |||||||||||||||||||
| Asset-related costs - Cost of products sold | 2 | — | 22 | — | |||||||||||||||||||
| Other costs - SG&A | — | — | 1 | 1 | |||||||||||||||||||
| Other costs - Other expense/(income) | — | (2) | (45) | 8 | |||||||||||||||||||
| $ | 7 | $ | 4 | $ | (7) | $ | 18 | ||||||||||||||||
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We do not include our restructuring activities within Segment Adjusted Operating Income (as defined in Note 16, Segment Reporting). The pre-tax impact of allocating such expenses/(income) to our segments would have been (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| North America | $ | — | $ | — | $ | (46) | $ | 15 | |||||||||||||||
| Europe and Pacific Developed Markets | 10 | 4 | 42 | 1 | |||||||||||||||||||
| Emerging Markets | — | (4) | — | (5) | |||||||||||||||||||
| General corporate expenses | (3) | 4 | (3) | 7 | |||||||||||||||||||
| $ | 7 | $ | 4 | $ | (7) | $ | 18 | ||||||||||||||||
Note 6. Inventories
Inventories consisted of the following (in millions):
| September 26, 2026 | December 27, 2025 | ||||||||||
| Packaging and ingredients | $ | 898 | $ | 870 | |||||||
| Spare parts | 260 | 264 | |||||||||
| Work in process | 325 | 278 | |||||||||
| Finished products | 1,932 | 1,755 | |||||||||
| Inventories | $ | 3,415 | $ | 3,167 | |||||||
At December 27, 2025, inventories excluded amounts classified as held for sale. See Note 4, Acquisitions and Divestitures, for additional information.
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Note 7. Goodwill and Intangible Assets
As described in Note 1, Basis of Presentation, effective July 1, 2026, we combined our WEEM and AEM operating segments to form the Emerging Markets operating segment. Additionally, we moved the remaining European countries within the WEEM operating segment into the Europe and Pacific Developed Markets operating segment. Subsequently, we manage our operating results through three operating segments, all of which are reportable segments: North America, Europe and Pacific Developed Markets, and Emerging Markets. The reorganization resulted in a change to our operating and reportable segments and impacted how we define our existing reporting units, resulting in a goodwill triggering event as further discussed below.
Goodwill:
Changes in the carrying amount of goodwill, by segment, were (in millions):
| North America | Europe and Pacific Developed Markets | Emerging Markets | Total | ||||||||||||||||||||
| Balance at December 27, 2025 | $ | 20,392 | $ | 1,470 | $ | 317 | $ | 22,179 | |||||||||||||||
Impairment losses | (1,653) | (788) | (69) | (2,510) | |||||||||||||||||||
| Translation adjustments and other | (1) | (30) | 11 | (20) | |||||||||||||||||||
Balance at September 26, 2026 | $ | 18,738 | $ | 652 | $ | 259 | $ | 19,649 | |||||||||||||||
2026 Year-to-Date Goodwill Impairment Testing
Q3 2026 Goodwill Impairment Testing
We performed our 2026 annual impairment test as of June 28, 2026, which was the first day of our third quarter of 2026. We performed a qualitative impairment test, given the proximity of our annual impairment test date to the interim impairment test performed as of the end of the second quarter of 2026. We did not identify any impairments to goodwill as a result of our annual impairment test.
In addition, as of July 1, 2026, the organizational changes discussed above resulted in a change to certain reporting units. Our Western Europe (“WE”); Europe, Middle East, Africa (“EMEA East”); and Asia reporting units were reorganized into four reporting units: Europe; EurAsia; China; and Middle East and Africa (“MEA”). Our Australia, New Zealand, and Japan (“ANJ”); Latin America (“LATAM”); and all North America reporting units remained unchanged.
As a result of this reorganization, we reassigned assets and liabilities to the Europe, EurAsia, China, and MEA reporting units and allocated goodwill using the relative fair value approach. We performed an interim impairment test on the affected reporting units on both a pre- and post-reorganization basis.
We performed our pre-reorganization impairment test as of July 1, 2026, and did not identify any impairments. We performed our post-reorganization impairment test of the new China, EurAsia, and MEA reporting units within our Emerging Markets segment, and the new Europe reporting unit in our Europe and Pacific Developed Markets segment. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our post-reorganization impairment test, we recognized non-cash goodwill impairment losses of $69 million in SG&A in the third quarter of 2026, all of which related to our EurAsia reporting unit within our Emerging Markets segment. The goodwill impairment was primarily driven by the Indonesia business, which had a carrying amount exceeding its fair value and was transferred from the former Asia reporting unit to the new EurAsia reporting unit as part of the reorganization.
As of their latest impairment test, the goodwill carrying amount was $10.1 billion in our Taste Elevation (“TE”) reporting unit, $7.3 billion in our Hydration, Desserts, & Meals (“HDM”) reporting unit, $1.2 billion in our Meat, Cheese, Coffee, & Snacks (“MCCS”) reporting unit, $650 million in our Europe reporting unit, $258 million in our China reporting unit, and $80 million in our Away From Home & Kraft Heinz Ingredients (“AFH”) reporting unit. There is no goodwill remaining in our ANJ, Canada, EurAsia, MEA, LATAM, and Other North America reporting units.
As of September 26, 2026, we maintain 12 reporting units globally, six of which comprise our goodwill balance. These six reporting units had an aggregate goodwill carrying amount of $19.6 billion at September 26, 2026.
Accumulated impairment losses to goodwill were $22.7 billion as of September 26, 2026, and $20.2 billion as of December 27, 2025.
Q2 2026 Goodwill Impairment Testing
In the second quarter of 2026, we concluded that the sustained decline in our share price and market capitalization, along with significant downside volatility during the second quarter, constituted a triggering event requiring an interim goodwill impairment
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assessment for all of our reporting units. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.
As a result of the interim impairment test, we recognized non-cash goodwill impairment losses of $1.7 billion in SG&A in the second quarter of 2026, of which $788 million related to our Western Europe (“WE”) reporting unit within our Europe and Pacific Developed Markets segment, as well as $656 million related to our HDM reporting unit, $217 million related to our Elevation reporting unit, and $55 million related to our Canada reporting unit within our North America segment.
The goodwill impairments were driven by a combination of the market’s perceived risk of our ability to achieve future cash flow projections and the inclusion of updated cash flow expectations, which reflect the previously announced investments in marketing, sales, and R&D, as well as the allocation of those investments to reporting units and brands. These investments are expected to strengthen the competitive positioning of our brands; however, we believe the market remains uncertain as to the Company’s ability to achieve the plan.
Additionally, as of the last day of the second quarter of 2026, we separated the Elevation reporting unit into two reporting units, TE and AFH, in an effort to drive focus and clarity in our organizational structure and reporting processes. As a result of this reorganization, we reassigned assets and liabilities and reallocated the existing goodwill, using the fair value approach, from the former Elevation reporting unit into the new reporting units, TE and AFH.
We performed our pre- and post-reorganization impairment tests as of June 27, 2026, which was the last day of the second quarter of 2026. We utilized the discounted cash flow method under the income approach to estimate the fair value as of June 27, 2026. As a result of our post-reorganization impairment test, we recognized non-cash goodwill impairment losses of $725 million in SG&A related to the AFH reporting unit within our North America segment. The impairment charge was largely due to the AFH business having a higher asset base supporting a lower margin business compared to the Taste Elevation business.
2025 Year-to-Date Goodwill Impairment Testing
Q3 2025 Goodwill Impairment Testing
As of the first day of the third quarter of 2025, certain organizational changes occurred that resulted in a change to the reporting unit composition within our North America segment. Our six North America reporting units — Taste Elevation, Ready Meals and Snacking (“TMS”), Hydration & Desserts (“HD”), Meat & Cheese (“MC”), Away from Home & Kraft Heinz Ingredients (“AFH”), Canada and North America Coffee (“CNAC”), and Other North America — were reorganized into five reporting units: Elevation; Hydration, Desserts, & Meals (“HDM”); MCCS; Canada; and Other North America.
As a result of this reorganization, we reassigned assets and liabilities to the applicable reporting units and allocated goodwill using the relative fair value approach. We performed an interim impairment test on the affected reporting units on both a pre- and post-reorganization basis.
We performed our pre-reorganization impairment test as of June 29, 2025, which was our first day of the third quarter of 2025. There were five reporting units affected by the reassignment of assets and liabilities that maintained a goodwill balance as of our pre-reorganization impairment test date. These reporting units were TMS, HD, MC, AFH, and CNAC. Our Other North America reporting unit did not have a goodwill balance as of our pre-reorganization impairment test date.
As part of our pre-reorganization impairment test, we utilized the discounted cash flow method under the income approach to estimate the fair values as of June 29, 2025 for the five reporting units noted above. As a result of our pre-reorganization impairment test, we concluded that the fair value of these reporting units exceeded their carrying amounts and no impairment was recorded.
We performed our post-reorganization impairment test in conjunction with our 2025 annual impairment test and tested the new North America reporting units (Elevation, HDM, MCCS, Canada, and Other North America) along with the reporting units in our Europe and Pacific Developed Markets and Emerging Markets segments. We tested our reporting units for impairment as of the first day of our third quarter, which was June 29, 2025 for our 2025 annual impairment test. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our 2025 annual impairment test, we determined that the fair value of each of the reporting units tested was in excess of its carrying amount and no impairments were recorded.
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Q2 2025 Goodwill Impairment Testing
During the second quarter of 2025, we concluded that the sustained decline in our share price and market capitalization was a triggering event requiring an interim goodwill impairment assessment for all reporting units. We performed an interim impairment test (“Q2 2025 Impairment Test”) as of the last day of our second quarter, June 28, 2025, and utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units.
As a result, we recognized non-cash goodwill impairment losses of $6.7 billion in SG&A in the second quarter of 2025, of which $3.1 billion related to our Taste Elevation, Ready Meals and Snacking (“TMS”) reporting unit, $1.6 billion related to our Meat & Cheese (“MC”) reporting unit, $805 million related to our Canada and North America Coffee (“CNAC”) reporting unit, and $400 million related to our Away from Home & Kraft Heinz Ingredients reporting unit within our North America segment, as well as $819 million related to our WE reporting unit within our Europe and Pacific Developed Markets segment.
The impairments of our TMS, AFH, WE, MC, and CNAC reporting units were primarily due to the market’s perceived risk of our ability to achieve our future cash flow projections, due, in part, to uncertainty in the macroeconomic environment in which we operate. The impairment of our MC reporting unit was also partially driven by a reduction of future long-term growth assumptions.
Additional Goodwill Considerations
As of their latest quantitative impairment test, our TE, HDM, Europe, and AFH reporting units had less than 5% fair value over carrying amount with an aggregate goodwill carrying amount of $18.2 billion. Our MCCS reporting unit had between 5% to 10% fair value over carrying amount and an aggregate carrying amount of $1.2 billion, and our China reporting unit had 20-50% fair value over carrying amount and an aggregate carrying amount of $258 million.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions, and to consider the market multiples of certain peer and guideline companies. These assumptions and estimates include estimated future annual 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, and other market factors. As part of each reporting unit’s latest impairment test, we used discount rates ranging from 6.8% to 13.5% and long-term growth rates ranging from 0.0% to 4.0%. If current expectations of future growth rates and margins are not met, if market factors outside of our control change (such as discount rates, market capitalization, income tax rates, foreign currency exchange rates, or inflation), or if management’s expectations or plans otherwise change (including updates to our long-term operating plans), then one or more of our reporting units might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets could lead to future goodwill impairments.
Indefinite-lived intangible assets:
Changes in the carrying amount of indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions):
| Balance at December 27, 2025 | $ | 34,165 | |||
| Impairment losses | (4,902) | ||||
| Translation adjustments and other | (91) | ||||
Balance at September 26, 2026 | $ | 29,172 | |||
Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $29.2 billion at September 26, 2026.
2026 Year-to-Date Indefinite-Lived Intangible Asset Impairment Testing
Q3 2026 Indefinite-Lived Intangible Asset Impairment Testing
We performed our 2026 annual impairment test as of June 28, 2026, which was the first day of our third quarter of 2026. We performed a qualitative impairment test, given the proximity of our annual impairment test date to the interim impairment test performed as of the end of the second quarter of 2026. We did not identify any indefinite-lived intangible asset impairments as a result of our annual impairment test.
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Q2 2026 Indefinite-Lived Intangible Asset Impairment Testing
In the second quarter of 2026, we concluded that the sustained decline in our share price and market capitalization, along with the significant downside volatility in our share price during the second quarter, constituted a triggering event requiring an interim indefinite-lived intangible asset impairment assessment of our brands. As part of the interim impairment test, we utilized the multi-period excess earnings and relief from royalty method under the income approach to estimate the fair value of our indefinite-lived intangible assets.
As a result, we recognized non-cash intangible asset impairment losses of $4.9 billion in SG&A in the second quarter of 2026, of which $3.4 billion related to Kraft, $660 million related to Oscar Mayer, $445 million related to Lunchables, and $379 million related to five other brands in our North America segment. We recorded a $48 million impairment to one brand in our Emerging Markets segment and $10 million to one brand in our Europe and Pacific Developed Markets segment.
The impairments of these brands were driven by a combination of the market’s perceived risk of our ability to achieve future revenue and margin growth projections and the inclusion of updated cash flow expectations, which reflect the previously announced investments in marketing, sales, and R&D, as well as the allocation of those investments to reporting units and brands. These investments are expected to strengthen the competitive positioning of our brands; however, we believe the market remains uncertain as to the Company’s ability to achieve the plan. After these impairments, the aggregate carrying amount of these brands was $9.3 billion.
2025 Year-to-Date Indefinite-Lived Intangible Asset Impairment Testing
Q3 2025 Indefinite-Lived Intangible Asset Impairment Testing
We performed our 2025 annual impairment test as of June 29, 2025, which was the first day of our third quarter of 2025. As part of the annual impairment test, we utilized the multi-period excess earnings and relief from royalty methods under the income approach to estimate the fair value of our indefinite-lived intangible assets. As a result of our 2025 annual impairment test, we concluded that the fair value of these brands exceeded their carrying amounts and no impairment was recorded.
Q2 2025 Indefinite-Lived Intangible Asset Impairment Testing
During the second quarter of 2025, we concluded that the sustained decline in our share price and market capitalization was a triggering event requiring an interim indefinite-lived intangible asset impairment assessment for our brands. As part of the Q2 2025 Impairment Test, we utilized the multi-period excess earnings and relief from royalty method under the income approach to estimate the fair value of our indefinite-lived intangible assets.
As a result, we recognized non-cash intangible asset impairment losses of $2.6 billion in SG&A in the second quarter of 2025, of which $1.9 billion related to Kraft, $382 million related to Velveeta, $175 million related to Lunchables, $100 million related to Maxwell House, and $42 million related to two other brands in our North America segment, consistent with ownership of the trademarks. The impairments of these brands were primarily due to the market’s perceived risk of our ability to achieve our future year revenue growth and margin growth assumptions, due in part to uncertainty in the macroeconomic environment in which we operate.
Additional Indefinite-Lived Intangible Asset Considerations
As of their latest impairment test, brands with 20% or less fair value over carrying amount had an aggregate carrying amount after impairment of $12.8 billion, brands with 20% to 50% fair value over carrying amount had an aggregate carrying amount of $6.9 billion, and brands that had over 50% fair value over carrying amount had an aggregate carrying amount of $9.5 billion.
Our brands that had 20% or less excess fair value over carrying amount as of the annual impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future. Although our remaining brands had more than 20% excess fair value over carrying amount, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
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Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual brands requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions, and to consider the market multiples of certain peer and guideline companies. These assumptions and estimates include estimated future annual cash flows, income tax considerations, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors. As part of each brand’s latest impairment test, we used discount rates ranging from 8.1% to 10.3%, long-term growth rates ranging from 0.0% to 4.0%, and royalty rates ranging from 3.0% to 20.0%. If current expectations of future growth rates, royalty rates, and margins are not met, if market factors outside of our control change (such as discount rates, market capitalization, income tax rates, foreign currency exchange rates, or inflation), or if management’s expectations or plans otherwise change (including updates to our long-term operating plans), then one or more of our brands might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets could lead to future intangible asset impairments.
Definite-lived intangible assets:
Definite-lived intangible assets were (in millions):
| September 26, 2026 | December 27, 2025 | ||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net(a) | ||||||||||||||||||||||||||||||
| Trademarks | $ | 2,370 | $ | (1,103) | $ | 1,267 | $ | 2,369 | $ | (1,016) | $ | 1,353 | |||||||||||||||||||||||
| Customer-related assets | 3,661 | (1,779) | 1,882 | 3,704 | (1,700) | 2,004 | |||||||||||||||||||||||||||||
| Other | 12 | (5) | 7 | 11 | (4) | 7 | |||||||||||||||||||||||||||||
| $ | 6,043 | $ | (2,887) | $ | 3,156 | $ | 6,084 | $ | (2,720) | $ | 3,364 | ||||||||||||||||||||||||
(a) At December 27, 2025, definite-lived intangible assets excluded amounts classified as held for sale due to the Italy Infant Transaction. See Note 4, Acquisitions and Divestitures, for additional information on amounts held for sale.
Amortization expense for definite-lived intangible assets was $62 million for the three months and $185 million for the nine months ended September 26, 2026, and $61 million for the three months and $184 million for the nine months ended September 27, 2025. Aside from amortization expense and the impacts of foreign currency, the change in definite-lived intangible assets from December 27, 2025 to September 26, 2026 is primarily related to non-cash intangible asset impairment losses of $25 million for six definite-lived intangible assets within our Europe and Pacific Developed Markets and North America segments.
We estimate that amortization expense related to definite-lived intangible assets will be approximately $250 million in 2026, $240 million in 2027 and 2028, and $230 million in 2029, 2030, and 2031.
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Note 8. Income Taxes
The provision for income taxes consists of provisions for federal, state, and non-U.S. income taxes. We operate in an international environment; accordingly, the consolidated effective tax rate is a composite rate reflecting the earnings in various locations and the applicable tax rates. Additionally, the calculation of the percentage point impact of goodwill impairment and other items on the effective tax rate is affected by income/(loss) before income taxes. Further, small movements in tax rates due to a change in tax law or a change in tax rates that cause us to revalue our deferred tax balances produce volatility in our effective tax rate. Our quarterly income tax provision is determined based on our estimated full year effective tax rate, adjusted for tax attributable to infrequent or unusual items, which are recognized on a discrete period basis in the income tax provision for the period in which they occur.
Our effective tax rate for the three months ended September 26, 2026 was an expense of 23.8% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill impairment losses of 2.0%. In addition to the impact of these non-cash impairment losses, our effective tax rate was favorably impacted by changes in estimates of certain 2025 U.S. income and deductions, certain discrete deferred tax adjustments, and the geographic mix of pre-tax income in various non-U.S. jurisdictions.
Our effective tax rate for the three months ended September 27, 2025 was an expense of 24.0% on pre-tax income, which was favorably impacted by certain discrete deferred tax adjustments, changes in estimates of certain 2024 U.S. income and deductions, and the geographic mix of pre-tax income in various non-U.S. jurisdictions.
The year-over-year change in the effective tax rate for the three-month period was primarily due to the impact of certain discrete deferred tax adjustments and a more favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.
Our effective tax rate for the nine months ended September 26, 2026 was a benefit of 11.5% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill impairment losses of 12.7%. In addition to the impact of these non-cash impairment losses, our effective tax rate was favorably impacted by the geographic mix of pre-tax income in various non-U.S. jurisdictions.
Our effective tax rate for the nine months ended September 27, 2025 was an expense of 2.4% on pre-tax loss, which included the net unfavorable effective tax rate impact of non-deductible goodwill impairments of 24.8%. In addition to the impact of these non-cash impairment losses, our effective tax rate was favorably impacted by the geographic mix of pre-tax income in various non-U.S. jurisdictions.
The year-over-year change in the effective tax rate for the nine month period was primarily due to the impact of non-deductible goodwill impairments and a more favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.
Other Income Tax Matters:
We are currently under examination for income taxes by the Internal Revenue Service (“IRS”) for the years 2018 through 2022. In 2023, we received two Notices of Proposed Adjustment (the “NOPAs”) relating to transfer pricing with our foreign subsidiaries for the years 2018 and 2019. The NOPAs propose an increase to our U.S. taxable income that could result in additional U.S. federal income tax expense and liability of approximately $200 million for 2018 and approximately $210 million for 2019, excluding interest, and assert penalties of approximately $85 million for each of 2018 and 2019. In 2025, we received two NOPAs for the years 2020 through 2022 that could result in additional U.S. federal income tax expense and liability of approximately $200 million for 2020, $210 million for 2021, and $200 million for 2022, excluding interest, and assert penalties of approximately $85 million for each year. We strongly disagree with the IRS’s positions, believe that our tax positions are well documented and properly supported, and intend to vigorously contest the positions taken by the IRS and pursue all available administrative and judicial remedies. Therefore, we have not recorded any reserves related to this issue. We continue to maintain the same operating model and transfer pricing methodology with our foreign subsidiaries that was in place for the years 2018 through 2022. We believe our income tax reserves are appropriate for all open tax years and that final adjudication of this matter will not have a material impact on our results of operations and cash flows. However, the ultimate outcome of this matter is uncertain, and if we are required to pay the IRS additional U.S. taxes, interest, and/or potential penalties, our results of operations and cash flows could be materially affected.
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Note 9. Employees’ Stock Incentive Plans
Stock Options:
Our stock option activity and related information was:
| Number of Stock Options | Weighted Average Exercise Price (per share) | ||||||||||
| Outstanding at December 27, 2025 | 5,520,483 | $ | 42.37 | ||||||||
| Granted | 1,015,873 | 24.61 | |||||||||
| Forfeited | (690,470) | 57.29 | |||||||||
| Outstanding at September 26, 2026 | 5,845,886 | 37.52 | |||||||||
Restricted Stock Units:
Our restricted stock unit (“RSU”) activity and related information was:
| Number of Units | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 27, 2025 | 6,611,644 | $ | 34.52 | ||||||||
| Granted | 4,500,209 | 24.99 | |||||||||
| Forfeited | (740,426) | 30.36 | |||||||||
| Vested | (1,889,803) | 37.51 | |||||||||
| Outstanding at September 26, 2026 | 8,481,624 | 29.16 | |||||||||
The aggregate fair value of RSUs that vested during the period was $46 million for the nine months ended September 26, 2026.
Performance Share Units:
Our performance share unit (“PSU”) activity and related information was:
| Number of Units | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 27, 2025 | 5,460,237 | $ | 30.64 | ||||||||
| Granted | 3,081,049 | 15.40 | |||||||||
| Forfeited | (869,010) | 28.10 | |||||||||
| Vested | (763,492) | 33.74 | |||||||||
| Outstanding at September 26, 2026 | 6,908,784 | 23.83 | |||||||||
The aggregate fair value of PSUs that vested during the period was $19 million for the nine months ended September 26, 2026.
Note 10. Postemployment Benefits
See our consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 27, 2025 for additional information on our postemployment-related accounting policies.
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Pension Plans
Components of Net Pension Cost/(Benefit):
Net pension cost/(benefit) consisted of the following (in millions):
| For the Three Months Ended | |||||||||||||||||||||||
| U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Service cost | $ | — | $ | — | $ | 1 | $ | 2 | |||||||||||||||
| Interest cost | 27 | 28 | 14 | 15 | |||||||||||||||||||
| Expected return on plan assets | (44) | (44) | (19) | (24) | |||||||||||||||||||
| Amortization of prior service costs/(credits) | — | — | 1 | 1 | |||||||||||||||||||
| Amortization of unrecognized losses/(gains) | — | — | 3 | 4 | |||||||||||||||||||
Settlements | — | 1 | — | — | |||||||||||||||||||
| Net pension cost/(benefit) | $ | (17) | $ | (15) | $ | — | $ | (2) | |||||||||||||||
For the Nine Months Ended | |||||||||||||||||||||||
| U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Service cost | $ | 1 | $ | 1 | $ | 3 | $ | 4 | |||||||||||||||
| Interest cost | 81 | 93 | 41 | 43 | |||||||||||||||||||
| Expected return on plan assets | (132) | (143) | (57) | (66) | |||||||||||||||||||
| Amortization of prior service costs/(credits) | — | 1 | 3 | 2 | |||||||||||||||||||
| Amortization of unrecognized losses/(gains) | — | — | 9 | $ | 11 | ||||||||||||||||||
| Settlements | — | 11 | — | — | |||||||||||||||||||
| Net pension cost/(benefit) | $ | (50) | $ | (37) | $ | (1) | $ | (6) | |||||||||||||||
We present all non-service cost components of net pension cost/(benefit) within other expense/(income) on our condensed consolidated statements of income.
Employer Contributions:
Related to our non-U.S. pension plans, we contributed $5 million during the nine months ended September 26, 2026 and $4 million during the nine months ended September 27, 2025. We plan to make further contributions of approximately $1 million during the remainder of 2026. We did not contribute to our U.S. pension plans during the nine months ended September 26, 2026 or September 27, 2025 and do not plan to make contributions during the remainder of 2026. Estimated future contributions take into consideration current economic conditions, which at this time are expected to have minimal impact on expected contributions for the remainder of 2026. Our actual contributions and plans may change due to many factors, including changes in tax, employee benefit, or other laws and regulations, tax deductibility, significant differences between expected and actual pension asset performance or interest rates, or other factors.
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Postretirement Plans
Components of Net Postretirement Cost/(Benefit):
Net postretirement cost/(benefit) consisted of the following (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Service cost | $ | — | $ | 1 | $ | 1 | $ | 2 | |||||||||||||||
| Interest cost | 5 | 7 | 16 | 22 | |||||||||||||||||||
| Expected return on plan assets | (7) | (12) | (23) | (35) | |||||||||||||||||||
| Amortization of prior service costs/(credits) | (3) | (3) | (8) | (9) | |||||||||||||||||||
| Amortization of unrecognized losses/(gains) | (6) | (7) | (18) | (20) | |||||||||||||||||||
Settlements(a) | — | — | (45) | — | |||||||||||||||||||
| Net postretirement cost/(benefit) | $ | (11) | $ | (14) | $ | (77) | $ | (40) | |||||||||||||||
(a) Settlements represent a recognized non-cash benefit of $45 million related to the settlement of our U.S Retiree Life Insurance Plan.
We present all non-service cost components of net postretirement cost/(benefit) within other expense/(income) on our condensed consolidated statements of income.
Employer Contributions:
Related to our postretirement benefit plans, we contributed $6 million during the nine months ended September 26, 2026 and $7 million during the nine months ended September 27, 2025. We plan to make further contributions of approximately $5 million to our postretirement benefit plans during the remainder of 2026. Estimated future contributions take into consideration current economic conditions, which at this time are expected to have minimal impact on expected contributions for the remainder of 2026. Our actual contributions and plans may change due to many factors, including changes in tax, employee benefit, or other laws and regulations, tax deductibility, significant differences between expected and actual postretirement plan asset performance or interest rates, or other factors.
Note 11. Financial Instruments
See our consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 27, 2025 for additional information on our overall risk management strategies, our use of derivatives, and our related accounting policies.
Derivative Volume:
The notional values of our outstanding derivative instruments were (in millions):
| Notional Amount | |||||||||||
| September 26, 2026 | December 27, 2025 | ||||||||||
| Commodity contracts | $ | 1,187 | $ | 976 | |||||||
| Foreign exchange contracts | 3,729 | 4,229 | |||||||||
| Cross-currency contracts | 3,083 | 3,083 | |||||||||
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Fair Value of Derivative Instruments:
The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the condensed consolidated balance sheets were (in millions):
| September 26, 2026 | |||||||||||||||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Total Fair Value | |||||||||||||||||||||||||||||||||
| Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts(a) | $ | — | $ | — | $ | 26 | $ | 50 | $ | 26 | $ | 50 | |||||||||||||||||||||||
Cross-currency contracts(b) | — | — | 51 | 146 | 51 | 146 | |||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Commodity contracts(c) | 27 | 44 | 91 | 18 | 118 | 62 | |||||||||||||||||||||||||||||
Foreign exchange contracts(a) | — | — | 10 | 22 | 10 | 22 | |||||||||||||||||||||||||||||
| Total fair value | $ | 27 | $ | 44 | $ | 178 | $ | 236 | $ | 205 | $ | 280 | |||||||||||||||||||||||
(a) At September 26, 2026, the fair value of our derivative assets was recorded in other current assets ($32 million) and other non-current assets ($4 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($72 million).
(b) At September 26, 2026, the fair value of our derivative assets was recorded in other current assets ($41 million) and other non-current assets ($10 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($2 million) and other non-current liabilities ($144 million).
(c) At September 26, 2026, the fair value of our derivative assets was recorded in other current assets ($103 million) and other non-current assets ($15 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($59 million) and other non-current liabilities ($3 million).
| December 27, 2025 | |||||||||||||||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Total Fair Value | |||||||||||||||||||||||||||||||||
| Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts(a) | $ | — | $ | — | $ | 7 | $ | 30 | $ | 7 | $ | 30 | |||||||||||||||||||||||
Cross-currency contracts(b) | — | — | 46 | 210 | 46 | 210 | |||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Commodity contracts(c) | 11 | 53 | 2 | 20 | 13 | 73 | |||||||||||||||||||||||||||||
Foreign exchange contracts(a) | — | — | 14 | 13 | 14 | 13 | |||||||||||||||||||||||||||||
| Total fair value | $ | 11 | $ | 53 | $ | 69 | $ | 273 | $ | 80 | $ | 326 | |||||||||||||||||||||||
(a) At December 27, 2025, the fair value of our derivative assets was recorded in other current assets and the fair value of our derivative liabilities was recorded in other current liabilities ($42 million) and other non-current liabilities ($1 million).
(b) At December 27, 2025, the fair value of our derivative assets was recorded in other current assets ($38 million) and other non-current assets ($8 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($2 million) and other non-current liabilities ($208 million).
(c) At December 27, 2025, the fair value of our derivative assets was recorded in other current assets and the fair value of our derivative liabilities was recorded in other current liabilities ($70 million) and other non-current liabilities ($3 million).
The increase in the fair value of the Company’s net derivative position from December 27, 2025 to September 26, 2026 was primarily due to favorable energy and dairy contract prices relative to market forward prices at September 26, 2026. These gains remain subject to commodity price changes and may differ from amounts ultimately realized.
Our derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. We elect to record the gross assets and liabilities of our derivative financial instruments on the condensed consolidated balance sheets. If the derivative financial instruments had been netted on the condensed consolidated balance sheets, the asset and liability positions would each have been reduced by $113 million at September 26, 2026, and $45 million at December 27, 2025. We had posted collateral related to commodity derivative margin requirements of $16 million at September 26, 2026, which was included in prepaid expenses on our condensed consolidated balance sheets, and posted collateral related to commodity derivative margin requirements of $52 million at December 27, 2025, which was included in prepaid expenses on our condensed consolidated balance sheets.
20
Level 1 derivative financial assets and liabilities consist of commodity future and options contracts and are valued using quoted prices in active markets for identical assets and liabilities.
Level 2 derivative financial assets and liabilities consist of commodity swaps, foreign exchange forwards, options, and cross-currency contracts. Commodity swaps are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount. Foreign exchange forwards and swaps are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Foreign exchange options are valued using an income approach based on a Black-Scholes-Merton formula. This formula uses present value techniques and reflects the time value and intrinsic value based on observable market rates. Cross-currency contracts are valued based on observable market spot and swap rates.
We did not have any Level 3 derivative financial assets or liabilities in any period presented.
Our calculation of the fair value of derivative financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk.
Net Investment Hedging:
At September 26, 2026, we had the following items designated as net investment hedges:
•Non-derivative foreign-currency denominated debt with principal amounts of €3.4 billion;
•Cross-currency contracts with notional amounts of €954 million ($1.0 billion), C$1.3 billion ($900 million), and JPY9.6 billion ($68 million); and
•Foreign exchange contracts with notional amounts of CNY4.0 billion ($596 million).
The components of the gains and losses on our net investment in these designated foreign operations, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our cross-currency contracts and foreign exchange contracts.
Cash Flow Hedge Coverage:
At September 26, 2026, we had entered into foreign exchange contracts designated as cash flow hedges for periods not exceeding the next 2 years.
Fair Value Hedge Coverage:
At September 26, 2026, we had fair value hedges of the foreign currency exposure of both intercompany and external foreign currency denominated loans:
•Foreign exchange contracts with notional amounts of £400 million ($530 million) and the carrying value of the hedged item of $530 million is included in the current portion of long-term debt on the condensed consolidated balance sheets; and
•Cross-currency contracts with notional amounts of £683 million ($864 million) and MXN4.8 billion ($251 million) and the carrying value of intercompany hedged items of $1.2 billion.
The gains/(losses) on the hedged item, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our cross-currency and foreign exchange contracts, which are reported in the same income statement line item in the same period. The amounts excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis in the same line item as the hedged items.
Deferred Hedging Gains and Losses on Fair Value and Cash Flow Hedges:
Based on our valuation at September 26, 2026 and assuming market rates remain constant through contract maturities, we expect transfers to net income/(loss) of the existing losses reported in accumulated other comprehensive income/(losses) on interest rate cash flow hedges and cross-currency fair value hedges during the next 12 months to be insignificant. Additionally, we expect transfers to net income/(loss) of the existing gains reported in accumulated other comprehensive income/(losses) during the next 12 months on foreign exchange cash flow hedges, cross-currency cash flow hedges, and foreign exchange fair value hedges to be insignificant.
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Derivative Impact on the Statements of Comprehensive Income:
The following table presents the pre-tax amounts of derivative gains/(losses) deferred into accumulated other comprehensive income/(losses) and the income statement line item that will be affected when reclassified to net income/(loss) (in millions):
| Accumulated Other Comprehensive Income/(Losses) Component | Gains/(Losses) Recognized in Other Comprehensive Income/(Losses) Related to Derivatives Designated as Hedging Instruments | Location of Gains/(Losses) When Reclassified to Net Income/(Loss) | ||||||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||
| Cash flow hedges: | ||||||||||||||||||||||||||||||||
| Foreign exchange contracts | $ | — | $ | 1 | $ | — | $ | 1 | Net sales | |||||||||||||||||||||||
| Foreign exchange contracts | (1) | 19 | 22 | (29) | Cost of products sold | |||||||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | — | — | (3) | (1) | Cost of products sold | |||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | 1 | (2) | SG&A | |||||||||||||||||||||||||||
| Cross-currency contracts | — | (4) | — | 197 | Other expense/(income) | |||||||||||||||||||||||||||
| Cross-currency contracts | — | (2) | — | (12) | Interest expense | |||||||||||||||||||||||||||
| Interest rate contracts | — | — | (12) | — | Interest expense | |||||||||||||||||||||||||||
| Net investment hedges: | ||||||||||||||||||||||||||||||||
| Foreign exchange contracts | (7) | (4) | (37) | (4) | Other expense/(income) | |||||||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | (1) | 2 | 5 | 2 | Interest expense | |||||||||||||||||||||||||||
| Cross-currency contracts | (13) | 22 | 27 | (237) | Other expense/(income) | |||||||||||||||||||||||||||
| Cross-currency contracts (excluded component) | 7 | 8 | 20 | 30 | Interest expense | |||||||||||||||||||||||||||
| Fair value hedges: | ||||||||||||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | 1 | — | 3 | (3) | Other expense/(income) | |||||||||||||||||||||||||||
| Cross-currency contracts (excluded component) | 2 | 16 | 15 | 38 | Other expense/(income) | |||||||||||||||||||||||||||
| Total gains/(losses) recognized in statements of comprehensive income | $ | (12) | $ | 58 | $ | 41 | $ | (20) | ||||||||||||||||||||||||
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Derivative Impact on the Statements of Income:
The following tables present the pre-tax amounts of derivative gains/(losses) recorded to net income/(loss) and the affected income statement line items (in millions):
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| Cost of products sold | Interest expense | Other expense/(income) | Cost of products sold | Interest expense | Other expense/(income) | ||||||||||||||||||||||||||||||
| Total amounts presented in the condensed consolidated statements of income in which the following effects were recorded | $ | 4,127 | $ | 210 | $ | (39) | $ | 4,247 | $ | 240 | $ | (22) | |||||||||||||||||||||||
| Gains/(losses) related to derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Cash flow hedges:(a) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | $ | (1) | $ | — | $ | — | $ | 1 | $ | — | $ | — | |||||||||||||||||||||||
| Cross-currency contracts | — | (1) | 1 | — | (1) | (6) | |||||||||||||||||||||||||||||
Net investment hedges:(a) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | — | 2 | — | — | 1 | — | |||||||||||||||||||||||||||||
| Cross-currency contracts (excluded component) | — | 6 | — | — | 7 | — | |||||||||||||||||||||||||||||
Fair value hedges:(b) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | 2 | — | — | (14) | |||||||||||||||||||||||||||||
| Cross-currency contracts | — | — | (4) | — | — | 28 | |||||||||||||||||||||||||||||
Cross-currency contracts (excluded component)(a) | — | — | 1 | — | — | 3 | |||||||||||||||||||||||||||||
Hedged items | — | — | 2 | — | — | (14) | |||||||||||||||||||||||||||||
| Gains/(losses) related to derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
| Commodity contracts | 82 | — | — | (34) | — | — | |||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | (14) | — | — | (15) | |||||||||||||||||||||||||||||
| Cross-currency contracts | — | — | — | — | — | 7 | |||||||||||||||||||||||||||||
| Total gains/(losses) recognized in statements of income | $ | 81 | $ | 7 | $ | (12) | $ | (33) | $ | 7 | $ | (11) | |||||||||||||||||||||||
(a) Represents the pre-tax amounts of derivative gains/(losses) reclassified from accumulated other comprehensive income/(losses) to net income/(loss).
(b) Represents the pre-tax amounts of the hedge and hedged items gains/(losses) in fair value hedges.
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For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| Cost of products sold | Interest expense | Other expense/(income) | Cost of products sold | Interest expense | Other expense/(income) | ||||||||||||||||||||||||||||||
| Total amounts presented in the condensed consolidated statements of income in which the following effects were recorded | $ | 12,189 | $ | 415 | $ | (164) | $ | 12,351 | $ | 709 | $ | (120) | |||||||||||||||||||||||
| Gains/(losses) related to derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Cash flow hedges:(a) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | $ | (9) | $ | — | $ | — | $ | 16 | $ | — | $ | — | |||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | — | — | — | (1) | — | — | |||||||||||||||||||||||||||||
| Interest rate contracts | — | (2) | — | — | — | — | |||||||||||||||||||||||||||||
| Cross-currency contracts | — | (1) | 4 | — | (12) | 229 | |||||||||||||||||||||||||||||
Net investment hedges:(a) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts (excluded component) | — | 4 | — | — | 1 | — | |||||||||||||||||||||||||||||
| Cross-currency contracts (excluded component) | — | 20 | — | — | 32 | — | |||||||||||||||||||||||||||||
Fair value hedges:(b) | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | (10) | — | — | 17 | |||||||||||||||||||||||||||||
| Cross-currency contracts | — | — | 28 | — | — | (59) | |||||||||||||||||||||||||||||
Cross-currency contracts (excluded component)(a) | — | — | 13 | — | — | 6 | |||||||||||||||||||||||||||||
| Hedged items | — | — | (18) | — | — | 42 | |||||||||||||||||||||||||||||
| Gains/(losses) related to derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
| Commodity contracts | 169 | — | — | (39) | — | — | |||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | (30) | — | — | (8) | |||||||||||||||||||||||||||||
| Interest rate contracts | — | — | (37) | — | — | — | |||||||||||||||||||||||||||||
| Cross-currency contracts | — | — | — | — | — | 9 | |||||||||||||||||||||||||||||
| Total gains/(losses) recognized in statements of income | $ | 160 | $ | 21 | $ | (50) | $ | (24) | $ | 21 | $ | 236 | |||||||||||||||||||||||
(a) Represents the pre-tax amounts of derivative gains/(losses) reclassified from accumulated other comprehensive income/(losses) to net income/(loss).
(b) Represents the pre-tax amounts of the hedge and hedged items gains/(losses) in fair value hedges.
Non-Derivative Impact on Statements of Comprehensive Income:
Related to our non-derivative foreign currency denominated debt instruments designated as net investment hedges, we recognized pre-tax losses of $3 million for the three months and pre-tax gains of $114 million for the nine months ended September 26, 2026 and pre-tax losses of $5 million for the three months and $140 million for the nine months ended September 27, 2025. These amounts were recognized in other comprehensive income/(loss).
Available-for-sale securities:
We invest in certain marketable fixed-income debt securities that are classified as available-for-sale.
We classify our investments in commercial paper, corporate bonds, and U.S. treasury and agency securities as Level 2 as these investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. We classify our investments in money market funds as Level 1 as the fair values of these investments are based on quoted (unadjusted) prices in active markets for identical assets.
The following table presents our available-for-sale debt securities’ amortized cost basis, fair value and unrealized gains and losses by significant investment category (in millions):
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September 26, 2026 | December 27, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis(a) | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Amortized Cost Basis(a) | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | $ | 2 | $ | — | $ | — | $ | 2 | $ | 456 | $ | — | $ | — | $ | 456 | |||||||||||||||||||||||||||||||
Commercial paper | 14 | — | — | 14 | 752 | — | — | 752 | |||||||||||||||||||||||||||||||||||||||
| U.S. treasury and agency | — | — | — | — | 72 | — | — | 72 | |||||||||||||||||||||||||||||||||||||||
| Money market funds | 250 | — | — | 250 | 1 | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 266 | $ | — | $ | — | $ | 266 | $ | 1,281 | $ | — | $ | — | $ | 1,281 | |||||||||||||||||||||||||||||||
(a) Amortized cost basis excludes approximately $1 million of accrued interest at September 26, 2026, and $4 million at December 27, 2025.
We purchased approximately $1.9 billion in corporate bonds, commercial paper, and U.S. treasury and agency securities and received approximately $3.2 billion in proceeds from maturity of corporate bonds, commercial paper, and U.S. treasury and agency securities for the nine months ended September 26, 2026. We purchased approximately $1.9 billion in corporate bonds and commercial paper and received approximately $891 million in proceeds from maturity of corporate bonds and commercial paper for the nine months ended September 27, 2025. No investments in corporate bonds, commercial paper, and U.S. treasury and agency securities were sold prior to maturity during the three and nine months ended September 26, 2026 or September 27, 2025. We recognized no direct write-offs or allowances for credit losses in earnings for the three and nine months ended September 26, 2026 or September 27, 2025. Cash flows related to the purchases and sale/maturity of these marketable securities are classified in the condensed consolidated statements of cash flows within investing activities.
The carrying values of our available-for-sale debt securities were included in the following line items in our condensed consolidated balance sheets (in millions):
| September 26, 2026 | December 27, 2025 | ||||||||||
Cash and cash equivalents | $ | 250 | $ | 221 | |||||||
Marketable securities | 16 | 1,060 | |||||||||
Total | $ | 266 | $ | 1,281 | |||||||
The decrease in the available-for-sale debt securities was primarily related to the funding of the repayment of the $1.9 billion senior notes that matured in June 2026. See Note 14, Commitments, Contingencies, and Debt, for additional information on our debt repayments. The contractual maturities of these available-for-sale debt securities are all within one-year as of September 26, 2026 and December 27, 2025.
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Note 12. Accumulated Other Comprehensive Income/(Losses)
The components of, and changes in, accumulated other comprehensive income/(losses), net of tax, were as follows (in millions):
| Foreign Currency Translation Adjustments | Net Postemployment Benefit Plan Adjustments | Net Cash Flow Hedge Adjustments | Net Fair Value Hedges | Total | |||||||||||||||||||||||||
| Balance as of December 27, 2025 | $ | (2,301) | $ | (61) | $ | (2) | $ | (6) | $ | (2,370) | |||||||||||||||||||
| Foreign currency translation adjustments | (156) | — | — | — | (156) | ||||||||||||||||||||||||
| Net deferred gains/(losses) on net investment hedges | 79 | — | — | — | 79 | ||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of net investment hedges | 19 | — | — | — | 19 | ||||||||||||||||||||||||
| Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) | (18) | — | — | — | (18) | ||||||||||||||||||||||||
| Net deferred gains/(losses) on cash flow hedges | — | — | 9 | — | 9 | ||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of cash flow hedges | — | — | (2) | — | (2) | ||||||||||||||||||||||||
| Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) | — | — | 6 | — | 6 | ||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of fair value hedges | — | — | — | 12 | 12 | ||||||||||||||||||||||||
| Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) | — | — | — | (10) | (10) | ||||||||||||||||||||||||
| Net actuarial gains/(losses) arising during the period | — | (51) | — | — | (51) | ||||||||||||||||||||||||
| Net postemployment benefit losses/(gains) reclassified to net income/(loss) | — | (44) | — | — | (44) | ||||||||||||||||||||||||
| Total other comprehensive income/(loss) | (76) | (95) | 13 | 2 | (156) | ||||||||||||||||||||||||
| Balance as of September 26, 2026 | $ | (2,377) | $ | (156) | $ | 11 | $ | (4) | $ | (2,526) | |||||||||||||||||||
The gross amount and related tax benefit/(expense) recorded in, and associated with, each component of other comprehensive income/(loss) were as follows (in millions):
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax | Net of Tax Amount | Before Tax Amount | Tax | Net of Tax Amount | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | $ | 5 | $ | — | $ | 5 | $ | (73) | $ | — | $ | (73) | |||||||||||||||||||||||
| Net deferred gains/(losses) on net investment hedges | (23) | 6 | (17) | 13 | (3) | 10 | |||||||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of net investment hedges | 6 | (1) | 5 | 10 | (3) | 7 | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) | (8) | 2 | (6) | (8) | 2 | (6) | |||||||||||||||||||||||||||||
| Net deferred gains/(losses) on cash flow hedges | (1) | 1 | — | 14 | (3) | 11 | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) | 1 | — | 1 | 6 | (1) | 5 | |||||||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of fair value hedges | 3 | (1) | 2 | 16 | (4) | 12 | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) | (1) | — | (1) | (3) | 1 | (2) | |||||||||||||||||||||||||||||
| Net deferred gains/(losses) on available-for-sale debt securities | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||
| Net actuarial gains/(losses) arising during the period | (72) | 18 | (54) | (35) | 8 | (27) | |||||||||||||||||||||||||||||
| Net postemployment benefit losses/(gains) reclassified to net income/(loss) | (5) | 2 | (3) | (4) | 1 | (3) | |||||||||||||||||||||||||||||
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For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax | Net of Tax Amount | Before Tax Amount | Tax | Net of Tax Amount | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | $ | (156) | $ | — | $ | (156) | $ | 920 | $ | — | $ | 920 | |||||||||||||||||||||||
| Net deferred gains/(losses) on net investment hedges | 104 | (25) | 79 | (381) | 92 | (289) | |||||||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of net investment hedges | 25 | (6) | 19 | 32 | (8) | 24 | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss) | (24) | 6 | (18) | (33) | 8 | (25) | |||||||||||||||||||||||||||||
| Net deferred gains/(losses) on cash flow hedges | 11 | (2) | 9 | 155 | (38) | 117 | |||||||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of cash flow hedges | (3) | 1 | (2) | (1) | — | (1) | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss) | 8 | (2) | 6 | (232) | 59 | (173) | |||||||||||||||||||||||||||||
| Amounts excluded from the effectiveness assessment of fair value hedges | 18 | (6) | 12 | 35 | (11) | 24 | |||||||||||||||||||||||||||||
| Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss) | (13) | 3 | (10) | (6) | 3 | (3) | |||||||||||||||||||||||||||||
| Net actuarial gains/(losses) arising during the period | (68) | 17 | (51) | (79) | 19 | (60) | |||||||||||||||||||||||||||||
| Net postemployment benefit losses/(gains) reclassified to net income/(loss) | (59) | 15 | (44) | (4) | 1 | (3) | |||||||||||||||||||||||||||||
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The amounts reclassified from accumulated other comprehensive income/(losses) were as follows (in millions):
| Accumulated Other Comprehensive Income/(Losses) Component | Reclassified from Accumulated Other Comprehensive Income/(Losses) to Net Income/(Loss) | Affected Line Item in the Statements of Income | ||||||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||
| Losses/(gains) on net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts(a) | (2) | (1) | (4) | (1) | Interest expense | |||||||||||||||||||||||||||
Cross-currency contracts(a) | (6) | (7) | (20) | (32) | Interest expense | |||||||||||||||||||||||||||
| Losses/(gains) on cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts(a) (b) | 1 | (1) | 9 | (15) | Cost of products sold | |||||||||||||||||||||||||||
Cross-currency contracts(a) (b) | (1) | 6 | (4) | (229) | Other expense/(income) | |||||||||||||||||||||||||||
Cross-currency contracts(a) (b) | 1 | 1 | 1 | 12 | Interest expense | |||||||||||||||||||||||||||
Interest rate contracts(b) | — | — | 2 | — | Interest expense | |||||||||||||||||||||||||||
| Losses/(gains) on fair value hedges: | ||||||||||||||||||||||||||||||||
Cross-currency contracts(a) | (1) | (3) | (13) | (6) | Other expense/(income) | |||||||||||||||||||||||||||
| Losses/(gains) on hedges before income taxes | (8) | (5) | (29) | (271) | ||||||||||||||||||||||||||||
| Losses/(gains) on hedges, income taxes | 2 | 2 | 7 | 70 | ||||||||||||||||||||||||||||
| Losses/(gains) on hedges | $ | (6) | $ | (3) | $ | (22) | $ | (201) | ||||||||||||||||||||||||
| Losses/(gains) on postemployment benefits: | ||||||||||||||||||||||||||||||||
Amortization of unrecognized losses/(gains)(c) | $ | (3) | $ | (3) | $ | (9) | $ | (9) | ||||||||||||||||||||||||
Amortization of prior service costs/(credits)(c) | (2) | (2) | (5) | (6) | ||||||||||||||||||||||||||||
Settlement and curtailment losses/(gains)(c) | — | 1 | (45) | 11 | ||||||||||||||||||||||||||||
| Losses/(gains) on postemployment benefits before income taxes | (5) | (4) | (59) | (4) | ||||||||||||||||||||||||||||
| Losses/(gains) on postemployment benefits, income taxes | 2 | 1 | 15 | 1 | ||||||||||||||||||||||||||||
| Losses/(gains) on postemployment benefits | $ | (3) | $ | (3) | $ | (44) | $ | (3) | ||||||||||||||||||||||||
(a) Represents recognition of the excluded component in net income/(loss) following a systematic and rational approach.
(b) Includes the effective portion of the related hedges.
(c) These components are included in the computation of net periodic postemployment benefit costs. See Note 10, Postemployment Benefits, for additional information.
In this note we have excluded activity and balances related to noncontrolling interest due to their insignificance. This activity was primarily related to foreign currency translation adjustments.
Note 13. Financing Arrangements
Trade Payables Programs:
We maintain agreements with third party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell one or more of those payment obligations to participating financial institutions. We have no economic interest in a supplier’s decision to enter into these agreements and no direct financial relationship with the financial institutions related to these programs. We pledged no assets or other forms of guarantees in connection with our trade payable programs. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 250 days. All amounts due to participating suppliers are paid to the third party on the original invoice due dates, regardless of whether a particular invoice was sold. Supplier participation in these agreements is voluntary. The amounts confirmed outstanding under these programs were $892 million at September 26, 2026 and $755 million at December 27, 2025. The amounts were included in accounts payable on our condensed consolidated balance sheets.
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Note 14. Commitments, Contingencies, and Debt
Legal Proceedings
We are involved in legal proceedings, claims, and governmental inquiries, inspections, or investigations (“Legal Matters”) arising in the ordinary course of our business. While we cannot predict with certainty the results of Legal Matters in which we are currently involved or may in the future be involved, we do not expect that the ultimate costs to resolve the Legal Matters that are currently pending will have a material adverse effect on our financial condition, results of operations, or cash flows.
Stockholder Derivative Action:
Certain of The Kraft Heinz Company’s current and former officers and directors and 3G Capital, Inc. and several of its subsidiaries and affiliates (the “3G Entities”) have been named as defendants in a consolidated stockholder derivative action, In re Kraft Heinz Company Derivative Litigation, which was originally filed in 2019 in the Delaware Court of Chancery. The consolidated amended complaint, which was filed on April 27, 2020, alleged state law claims, contending that the 3G Entities were controlling stockholders who owed fiduciary duties to the Company, and that they breached those duties by allegedly engaging in insider trading and misappropriating the Company’s material, non-public information. The complaint further alleged that certain of The Kraft Heinz Company’s current and former officers and directors breached their fiduciary duties to the Company by purportedly making materially misleading statements and omissions regarding the Company’s financial performance and the impairment of its goodwill and intangible assets, and by supposedly approving or allowing the 3G Entities’ alleged insider trading. The complaint sought relief against the defendants in the form of damages, disgorgement of all profits obtained from the alleged insider trading, contribution and indemnification, and an award of attorneys’ fees and costs. The defendants filed a motion to dismiss the consolidated amended complaint, which motion the Delaware Chancery Court granted in an order dated December 15, 2021. The plaintiffs filed a notice of appeal on January 13, 2022, and the Delaware Supreme Court affirmed the trial court’s dismissal with prejudice of the consolidated amended complaint in an order dated August 1, 2022. One of the plaintiffs from the In re Kraft Heinz Company Derivative Litigation subsequently filed a new complaint, Erste Asset Management GmbH v. Hees, et al., against certain current and former officers and directors of The Kraft Heinz Company on November 28, 2023 in the Delaware Court of Chancery, seeking to reinstate the plaintiff’s previously-dismissed claims and recover attorneys’ fees and costs incurred in the dismissed litigation on the basis of alleged newly discovered evidence. Specifically, the plaintiff alleges the 3G Entities caused the Company to make false and misleading public disclosures regarding the independence of two directors of The Kraft Heinz Company, one of whose independence plaintiff contends formed a basis for the court’s prior dismissal of the In re Kraft Heinz Company Derivative Litigation consolidated amended complaint. The defendants filed a motion to dismiss the complaint, which the Delaware Chancery Court granted in an order dated August 8, 2024, dismissing the complaint with prejudice. The plaintiff filed a notice of appeal on September 5, 2024. The Delaware Supreme Court issued an opinion and order on June 9, 2025, reversing the trial court’s dismissal of the complaint and remanding the case to the trial court for further proceedings.
Following remand, the trial court entered a stipulation on December 1, 2025, consolidating the previously dismissed In re Kraft Heinz Company Derivative Litigation with the Erste Asset Management GmbH v. Hees, et al. suit under Case No. 2019-0587-LWW. The stipulation also appointed the General Retirement System of the City of Detroit, the Police & Fire Retirement System of the City of Detroit, and Erste Asset Management GmbH as co-lead plaintiffs and their counsel as co-lead counsel. The plaintiffs filed a verified consolidated second amended complaint on May 8, 2026, and subsequently filed a motion on September 24, 2026, seeking leave of court to file a further amended complaint. We intend to vigorously defend against this lawsuit; however, we cannot reasonably estimate the potential range of loss, if any, due to the early stage of the proceedings.
Environmental Actions:
Since March 2024, the Company has been engaged in ongoing discussions with the U.S. Department of Justice, joined by the U.S. Environmental Protection Agency (“U.S. EPA”) and the Indiana Department of Environmental Management, concerning alleged violations of the Clean Water Act related to a Company facility in Kendallville, Indiana. Previously, the Company entered into an Administrative Order on Consent with the U.S. EPA that requires the Company to implement a compliance plan to address related alleged violations of the Clean Water Act related to the facility in Kendallville, Indiana. While we cannot predict with certainty the resolution of these discussions, we do not expect that the ultimate costs to resolve this matter will have a material adverse effect on our financial condition, results of operations, or cash flows.
Since September 2021, the Company has been involved in an administrative proceeding with the environmental authority from the State of Goiás (“SEMAD”) regarding alleged pollution in the Capivara stream related to a Company facility in Brazil. The administrative proceeding concluded in October 2026, after which the Company filed a lawsuit challenging the administrative fine and seeking to stay enforcement of the administrative decision while the litigation is pending. In a separate, but related, civil action filed by a local Public Prosecutor in September 2025, the court of first instance imposed a penalty against the Company, which was reversed by the appellate court in April 2026, and sent the case back to the lower court to be retried. Following retrial, the lower court maintained but reduced the penalty against the Company. The Company is appealing that
29
decision. In March 2026, the Public Prosecutor filed a criminal complaint against the Company and two former plant-level employees in connection with the same stream pollution contentions. In light of several available levels of appeal and the preliminary nature of these matters, we cannot predict with certainty how these matters will resolve; however, we do not expect that the ultimate costs to resolve either matter will have a material adverse effect on our financial condition, results of operations, or cash flows.
Debt
We may from time to time seek to retire or purchase our outstanding debt through redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately negotiated transactions, Rule 10b5-1 plans, or otherwise.
Borrowing Arrangements:
Together with Kraft Heinz Foods Company (“KHFC”), our 100% owned operating subsidiary, we have a credit agreement, which provides for a five-year senior unsecured revolving credit facility in an aggregate amount of $4.0 billion (as amended, the “Senior Credit Facility”). On July 8, 2026, we entered into an amendment to this agreement (“Senior Credit Facility Amendment”) which extends the maturity date from July 8, 2030 to July 8, 2031. See Note 17, Debt, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 27, 2025 for additional information on our borrowing arrangements.
Our long-term debt contains customary representations, covenants, and events of default. We were in compliance with all financial covenants as of September 26, 2026.
Tender Offer:
In May 2026, KHFC, our 100% owned operating subsidiary, commenced a cash tender offer to purchase up to the maximum combined aggregate purchase price of $1.1 billion, excluding accrued and unpaid interest, of its outstanding 4.375% Senior Notes due June 2046 (the “2046 Notes”) and 4.875% Senior Notes due October 2049 (the “2049 Notes”) (collectively the “Tender Offer”), listed in order of priority. Based on participation, KHFC elected to settle the Tender on the early settlement date, May 26, 2026. As a result, KHFC purchased $1.4 billion aggregate principal amount of the 2046 Notes that were validly tendered. The remaining outstanding aggregate principal amount for the 2046 Notes after this transaction was $1.4 billion. Since the aggregate purchase price of the senior notes validly tendered and not validly withdrawn as of the early tender time exceeded the maximum tender amount, we did not accept for purchase any of the 2049 Notes.
In connection with the Tender Offer, we recognized a gain on extinguishment of debt of $265 million within interest expense on the condensed consolidated statements of income for the nine months ended September 26, 2026. This gain reflects the difference between the consideration required to tender the debt, including fees, and the carrying value of the debt. The cash payments related to the debt extinguishment are classified as cash outflows from financing activities on the condensed consolidated statements of cash flows. For the nine months ended September 26, 2026, debt prepayment and extinguishment costs per the condensed consolidated statements of cash flows related to the Tender Offer were insignificant.
Debt Issuances:
2026 Debt Issuance
In the second quarter of 2026, KHFC, our 100% owned operating subsidiary, issued 500 million euro aggregate principal amount of 3.500% senior notes due May 2031, and 500 million euro aggregate principal amount of 3.950% senior notes due May 2034 (collectively, the “2026 Notes”). The 2026 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, if any, and interest on a senior unsecured basis. We used the proceeds from the issuance to fund the Tender Offer.
2025 Debt Issuance
In the first quarter of 2025, KHFC, our 100% owned operating subsidiary, issued 600 million euro aggregate principal amount of 3.250% senior notes due March 2033, $500 million aggregate principal amount of 5.200% senior notes due March 2032, and $500 million aggregate principal amount of 5.400% senior notes due March 2035 (collectively, the “2025 Notes”). The 2025 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, if any, and interest on a senior unsecured basis.
Debt Issuance Costs:
Debt issuance costs related to the 2026 Notes and 2025 Notes were insignificant.
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Debt Repayments:
In July 2026, we partially redeemed $1.0 billion aggregate principal amount of the 3.875% Senior Notes due May 2027 at a redemption price of $1.0 billion.
In June 2026, we repaid $1.9 billion in aggregate principal amount of senior notes that matured in the period.
In May 2025, we repaid 600 million euro aggregate principal amount of senior notes that matured in the period.
Fair Value of Debt:
At September 26, 2026, the aggregate fair value of our total debt was $16.4 billion as compared with a carrying value of $18.0 billion. At December 27, 2025, the aggregate fair value of our total debt was $20.4 billion as compared with a carrying value of $21.2 billion. We determined the fair value of our long-term debt using Level 2 inputs. Fair values are generally estimated based on quoted market prices for identical or similar instruments.
Synthetic Lease Arrangements
In June 2023, we entered into a non-cancellable synthetic lease for a distribution facility, for which we are the construction agent, for which we now anticipate the estimated construction cost to be approximately $625 million. The lease will commence upon completion of construction of the facility which is now expected to be in the later part of 2027. The term of the lease is five years after commencement. At the end of the lease term, we will be required to either purchase the facility or, in the event that option is not elected, to remarket the facility. Upon lease commencement, the lease classification, right-of-use asset, and lease liability will be determined and recorded. The lease arrangement contains a residual value guarantee of 100% of the total construction cost. The construction agreement and lease contain covenants that are consistent with our Senior Credit Facility.
Note 15. Earnings Per Share
Our earnings per common share (“EPS”) were:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| (in millions, except per share data) | |||||||||||||||||||||||
| Basic Earnings Per Common Share: | |||||||||||||||||||||||
| Net income/(loss) attributable to common shareholders | $ | 544 | $ | 615 | $ | (4,118) | $ | (6,497) | |||||||||||||||
| Weighted average shares of common stock outstanding | 1,186 | 1,184 | 1,186 | 1,188 | |||||||||||||||||||
| Net earnings/(loss) | $ | 0.46 | $ | 0.52 | $ | (3.47) | $ | (5.47) | |||||||||||||||
| Diluted Earnings Per Common Share: | |||||||||||||||||||||||
| Net income/(loss) attributable to common shareholders | $ | 544 | $ | 615 | $ | (4,118) | $ | (6,497) | |||||||||||||||
| Weighted average shares of common stock outstanding | 1,186 | 1,184 | 1,186 | 1,188 | |||||||||||||||||||
| Effect of dilutive equity awards | 6 | 2 | — | — | |||||||||||||||||||
| Weighted average shares of common stock outstanding, including dilutive effect | 1,192 | 1,186 | 1,186 | 1,188 | |||||||||||||||||||
| Net earnings/(loss) | $ | 0.46 | $ | 0.52 | $ | (3.47) | $ | (5.47) | |||||||||||||||
We use the treasury stock method to calculate the dilutive effect of outstanding equity awards in the denominator for diluted EPS. Anti-dilutive shares were 6 million for the three months and 18 million for the nine months ended September 26, 2026 and 5 million for the three months and 13 million for the nine months ended September 27, 2025.
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Note 16. Segment Reporting
In the third quarter of 2026, our internal reporting structure and reportable segments changed. We combined our WEEM and AEM operating segments to form the Emerging Markets operating segment in order to increase efficiencies and drive sustainable growth across our global business. In conjunction with the creation of the Emerging Markets operating segment, we moved certain European countries within the WEEM operating segment into the Europe and Pacific Developed Markets operating segment. Subsequently, we manage our operating results through three operating segments, all of which are reportable segments: North America, Europe and Pacific Developed Markets, and Emerging Markets. We have reflected this segment change in all historical periods presented.
Our chief operating decision maker (“CODM”) is our Chief Executive Officer. Our CODM evaluates segment performance based on several factors, including net sales and Segment Adjusted Operating Income. Segment Adjusted Operating Income is defined as operating income/(loss) excluding, when they occur, the impacts of restructuring activities, deal costs, separation costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters. Segment Adjusted Operating Income is a financial measure that assists our CODM in comparing our performance on a consistent basis by removing the impact of certain items that our CODM believes do not directly reflect our underlying operations. Our CODM also considers monthly budget-to-actual variances and year-over-year performance of Segment Adjusted Operating Income when making decisions about allocating resources to our segments. Our CODM does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.
Net sales by segment were (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| North America | $ | 4,485 | $ | 4,641 | $ | 13,569 | $ | 13,886 | |||||||||||||||
| Europe and Pacific Developed Markets | 910 | 964 | 2,757 | 2,813 | |||||||||||||||||||
| Emerging Markets | 720 | 632 | 2,098 | 1,889 | |||||||||||||||||||
| Total net sales | $ | 6,115 | $ | 6,237 | $ | 18,424 | $ | 18,588 | |||||||||||||||
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Segment Adjusted Operating Income was (in millions):
| For the Three Months Ended | |||||||||||||||||||||||
| September 26, 2026 | |||||||||||||||||||||||
| North America | Europe and Pacific Developed Markets | Emerging Markets | Total | ||||||||||||||||||||
| Net Sales | $ | 4,485 | $ | 910 | $ | 720 | |||||||||||||||||
Adjusted Cost of Products Sold(a) | 2,992 | 658 | 505 | ||||||||||||||||||||
Other segment items(b) | 582 | 156 | 134 | ||||||||||||||||||||
| Segment Adjusted Operating Income | $ | 911 | $ | 96 | $ | 81 | $ | 1,088 | |||||||||||||||
| General corporate expenses | (149) | ||||||||||||||||||||||
| Restructuring activities | (7) | ||||||||||||||||||||||
| Unrealized gains/(losses) on commodity hedges | 39 | ||||||||||||||||||||||
| Impairment losses | (72) | ||||||||||||||||||||||
Separation costs | (24) | ||||||||||||||||||||||
| Operating income/(loss) | 875 | ||||||||||||||||||||||
| Interest expense/(income) | 210 | ||||||||||||||||||||||
| Other expense/(income) | (39) | ||||||||||||||||||||||
| Income/(loss) before income taxes | $ | 704 | |||||||||||||||||||||
(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, separation costs, and certain non-ordinary course legal and regulatory matters.
(b) Other segment items for North America, Europe and Pacific Developed Markets, and Emerging Markets include SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.
| For the Three Months Ended | |||||||||||||||||||||||
| September 27, 2025 | |||||||||||||||||||||||
| North America | Europe and Pacific Developed Markets | Emerging Markets | Total | ||||||||||||||||||||
| Net Sales | $ | 4,641 | $ | 964 | $ | 632 | |||||||||||||||||
Adjusted Cost of Products Sold(a) | 3,081 | 686 | 448 | ||||||||||||||||||||
Other segment items(b) | 542 | 135 | 118 | ||||||||||||||||||||
| Segment Adjusted Operating Income | $ | 1,018 | $ | 143 | $ | 66 | $ | 1,227 | |||||||||||||||
| General corporate expenses | (121) | ||||||||||||||||||||||
| Restructuring activities | (6) | ||||||||||||||||||||||
| Unrealized gains/(losses) on commodity hedges | (23) | ||||||||||||||||||||||
| Impairment losses | (35) | ||||||||||||||||||||||
Separation costs | (17) | ||||||||||||||||||||||
| Operating income/(loss) | 1,025 | ||||||||||||||||||||||
| Interest expense/(income) | 240 | ||||||||||||||||||||||
| Other expense/(income) | (22) | ||||||||||||||||||||||
| Income/(loss) before income taxes | $ | 807 | |||||||||||||||||||||
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(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, separation costs, and certain non-ordinary course legal and regulatory matters.
(b) Other segment items for North America, Europe and Pacific Developed Markets, and Emerging Markets include SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs
For the Nine Months Ended | |||||||||||||||||||||||
| September 26, 2026 | |||||||||||||||||||||||
| North America | Europe and Pacific Developed Markets | Emerging Markets | Total | ||||||||||||||||||||
| Net Sales | $ | 13,569 | $ | 2,757 | $ | 2,098 | |||||||||||||||||
Adjusted Cost of Products Sold(a) | 8,859 | 1,925 | 1,464 | ||||||||||||||||||||
Other segment items(b) | 1,837 | 452 | 378 | ||||||||||||||||||||
| Segment Adjusted Operating Income | $ | 2,873 | $ | 380 | $ | 256 | $ | 3,509 | |||||||||||||||
| General corporate expenses | (471) | ||||||||||||||||||||||
| Restructuring activities | (38) | ||||||||||||||||||||||
| Unrealized gains/(losses) on commodity hedges | 116 | ||||||||||||||||||||||
| Impairment losses | (7,437) | ||||||||||||||||||||||
Separation costs | (90) | ||||||||||||||||||||||
| Operating income/(loss) | (4,411) | ||||||||||||||||||||||
| Interest expense/(income) | 415 | ||||||||||||||||||||||
| Other expense/(income) | (164) | ||||||||||||||||||||||
| Income/(loss) before income taxes | $ | (4,662) | |||||||||||||||||||||
(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, separation costs, and certain non-ordinary course legal and regulatory matters.
(b) Other segment items for North America, Europe and Pacific Developed Markets, and Emerging Markets include SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.
For the Nine Months Ended | |||||||||||||||||||||||
| September 27, 2025 | |||||||||||||||||||||||
| North America | Europe and Pacific Developed Markets | Emerging Markets | Total | ||||||||||||||||||||
| Net Sales | $ | 13,886 | $ | 2,813 | $ | 1,889 | |||||||||||||||||
Adjusted Cost of Products Sold(a) | 9,012 | 1,972 | 1,337 | ||||||||||||||||||||
Other segment items(b) | 1,582 | 406 | 316 | ||||||||||||||||||||
| Segment Adjusted Operating Income | $ | 3,292 | $ | 435 | $ | 236 | $ | 3,963 | |||||||||||||||
| General corporate expenses | (382) | ||||||||||||||||||||||
| Restructuring activities | (10) | ||||||||||||||||||||||
| Unrealized gains/(losses) on commodity hedges | (6) | ||||||||||||||||||||||
| Impairment losses | (9,301) | ||||||||||||||||||||||
Separation costs | (17) | ||||||||||||||||||||||
| Operating income/(loss) | (5,753) | ||||||||||||||||||||||
| Interest expense/(income) | 709 | ||||||||||||||||||||||
| Other expense/(income) | (120) | ||||||||||||||||||||||
| Income/(loss) before income taxes | $ | (6,342) | |||||||||||||||||||||
(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, separation costs, and certain non-ordinary course legal and regulatory matters.
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(b) Other segment items for North America, Europe and Pacific Developed Markets, and Emerging Markets include SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.
Total depreciation and amortization expense by segment was (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Depreciation and amortization expense: | |||||||||||||||||||||||
| North America | $ | 167 | $ | 158 | $ | 495 | $ | 474 | |||||||||||||||
| Europe and Pacific Developed Markets | 44 | 37 | 126 | 112 | |||||||||||||||||||
| Emerging Markets | 30 | 27 | 91 | 82 | |||||||||||||||||||
| Total segment depreciation and amortization expense | 241 | 222 | 712 | 668 | |||||||||||||||||||
| General corporate expenses | 21 | 23 | 56 | 49 | |||||||||||||||||||
| Total depreciation and amortization expense | $ | 262 | $ | 245 | $ | 768 | $ | 717 | |||||||||||||||
Total capital expenditures by segment were (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Capital expenditures: | |||||||||||||||||||||||
| North America | $ | 116 | $ | 104 | $ | 394 | $ | 369 | |||||||||||||||
| Europe and Pacific Developed Markets | 18 | 24 | 73 | 86 | |||||||||||||||||||
| Emerging Markets | 20 | 25 | 68 | 76 | |||||||||||||||||||
| Total segment capital expenditures | 154 | 153 | 535 | 531 | |||||||||||||||||||
| General corporate expenses | 16 | 18 | 64 | 65 | |||||||||||||||||||
| Total capital expenditures | $ | 170 | $ | 171 | $ | 599 | $ | 596 | |||||||||||||||
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In the first quarter of 2026, we modified our net sales disaggregation disclosure to present net sales by product category. This change has been reflected in all periods presented. We report net sales through ten product categories: Condiments, Sauces and Spreads, Ambient Meals and Sides, Refreshment Beverages, Meats, Frozen Meals and Sides, Cheese, Refrigerated Snacks, Desserts, Coffee, and Other.
•Condiments, Sauces, and Spreads primarily includes Heinz ketchup and other condiments, Kraft mayonnaise and dressings, Philadelphia cream cheese, Classico pasta sauces, and Miracle Whip, among other condiments and sauces.
•Ambient Meals and Sides primarily includes Kraft and Velveeta Mac & Cheese varieties, Heinz beans and soups, Stove Top stuffing mix, and other shelf stable products.
•Refreshment Beverages primarily includes Capri-Sun and Kool-Aid ready-to-drink beverages, Crystal Light powdered beverages, and Mio liquid concentrates.
•Meats primarily includes Oscar Mayer cold cuts, bacon, and hot dogs.
•Frozen Meals and Sides primarily includes Ore-Ida frozen potato products, and other frozen snacks and meals.
•Cheese primarily includes our Kraft and Velveeta cheese varieties.
•Refrigerated Snacks primarily includes Lunchables meal kits, Claussen pickles, and other refrigerated varieties.
•Desserts primarily includes Jell-O, Cool Whip and other dry packaged, refrigerated, and frozen desserts.
•Coffee primarily includes Maxwell House coffee and other coffee products.
•Other primarily includes our infant foods varieties and other regional products.
Net sales by category were (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Condiments, Sauces, and Spreads | $ | 2,750 | $ | 2,712 | $ | 8,349 | $ | 8,192 | |||||||||||||||
| Ambient Meals and Sides | 744 | 756 | 2,170 | 2,177 | |||||||||||||||||||
| Refreshment Beverages | 541 | 556 | 1,627 | 1,633 | |||||||||||||||||||
| Meats | 449 | 501 | 1,389 | 1,534 | |||||||||||||||||||
| Frozen Meals and Sides | 354 | 381 | 1,119 | 1,178 | |||||||||||||||||||
| Cheese | 378 | 387 | 1,164 | 1,203 | |||||||||||||||||||
| Refrigerated Snacks | 327 | 328 | 908 | 919 | |||||||||||||||||||
| Desserts | 287 | 291 | 812 | 797 | |||||||||||||||||||
| Coffee | 211 | 220 | 668 | 649 | |||||||||||||||||||
| Other | 74 | 105 | 218 | 306 | |||||||||||||||||||
| Total net sales | $ | 6,115 | $ | 6,237 | $ | 18,424 | $ | 18,588 | |||||||||||||||
Note 17. Other Financial Data
Condensed Consolidated Statements of Income Information
Other expense/(income) consists of the following (in millions):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net pension and postretirement non-service cost/(benefit) | $ | (29) | $ | (34) | $ | (133) | $ | (90) | |||||||||||||||
| Loss/(gain) on sale of business | 2 | 44 | (1) | 44 | |||||||||||||||||||
| Interest income | (24) | (34) | (106) | (85) | |||||||||||||||||||
| Foreign exchange losses/(gains) | (5) | 5 | 37 | 209 | |||||||||||||||||||
| Derivative losses/(gains) | 14 | (3) | 32 | (194) | |||||||||||||||||||
| Other miscellaneous expense/(income) | 3 | — | 7 | (4) | |||||||||||||||||||
| Other expense/(income) | $ | (39) | $ | (22) | $ | (164) | $ | (120) | |||||||||||||||
We present all non-service cost components of net pension cost/(benefit) and net postretirement cost/(benefit) within other expense/(income) on our condensed consolidated statements of income. See Note 10, Postemployment Benefits, for additional information on these components, including any curtailments and settlements, as well as information on our prior service costs/(credits) amortization. See Note 11, Financial Instruments, for information related to our derivative impacts.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
Objective:
The following discussion provides an analysis of our financial condition and results of operations from management's perspective and should be read in conjunction with the condensed consolidated financial statements and related notes included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. Our objective is to also provide discussion of material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides an understanding of our financial condition, results of operations, and cash flows.
Description of the Company:
We manufacture and market food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products throughout the world.
In the third quarter of 2026, our internal reporting structure and reportable segments changed. We combined our West and East Emerging Markets (“WEEM”) and Asia Emerging Markets (“AEM”) operating segments to form the Emerging Markets operating segment in order to increase efficiencies and drive sustainable growth across our global business. In conjunction with the creation of the Emerging Markets operating segment, we moved certain European countries within the WEEM operating segment into the Europe and Pacific Developed Markets operating segment. Subsequently, we manage our operating results through three operating segments, all of which are reportable segments: North America, Europe and Pacific Developed Markets, and Emerging Markets. We have reflected this segment change in all periods presented.
See Note 16, Segment Reporting, in Item 1, Financial Statements, for our financial information by segment.
Acquisitions and Divestitures:
On December 31, 2025, which was in the first quarter of our fiscal year 2026, we closed the sale of our infant and specialty food business in Italy within our Europe and Pacific Developed Markets segment for cash consideration of approximately $146 million. See Note 4, Acquisitions and Divestitures, in Item 1, Financial Statements, for additional information on divestiture activities.
Business Trends and Items Affecting Comparability of Financial Results
Inflation and Tariff Impacts:
During the nine months ended September 26, 2026, we experienced inflationary pressures in our supply chain costs at rates lower than those we experienced in the prior year period. However, we expect inflationary pressures to increase in the fourth quarter of 2026 due, in part, to the Iran Conflict, although there continues to be significant uncertainty. We continue to take measures to mitigate the impact of this inflation through efficiency initiatives, pricing actions, alternative sourcing, and hedging strategies. However, there has been, and we expect that there could continue to be, a difference between the timing of when these beneficial, mitigative 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.
Throughout 2025, we experienced increased inflationary pressures in our supply chain costs due to the tariff and trade policy actions taken by the United States. On February 20, 2026, the U.S. Supreme Court invalidated those tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act (“IEEPA”). New global tariffs initiated under different statutory authorities since the Supreme Court's decision remain in effect.
Further, on March 4, 2026, the Court of International Trade ordered the Trump Administration to begin refunding all tariffs imposed under IEEPA. Kraft Heinz is not the Importer of Record for the majority of the raw materials we source from outside of the U.S. As a result, any recovery is dependent on the actions of our suppliers and the contractually negotiated outcomes with these suppliers. Therefore, the timing and the amount of recovery are uncertain at this time.
37
Iran Conflict
On February 28, 2026, the United States and Israel launched a joint military operation against Iran targeting the country's leadership, nuclear facilities, missile sites, and security forces. In response, Iran launched retaliatory strikes against Israel, Saudi Arabia, United Arab Emirates, and other countries in the Persian Gulf region. As of September 26, 2026, less than 1% of consolidated total assets were located in the impacted countries, and less than 1% of consolidated net sales were generated by our businesses in the region. While the Iran conflict did not have a material impact on our results of operations through the third quarter of 2026, the ongoing geopolitical tensions involving Iran have increased, and could continue to increase, the risk of supply-chain disruption and inflationary pressures, particularly related to procurement and logistics costs. As the situation is rapidly changing, we will continue to evaluate the potential impact that this conflict has on our business.
Regulatory Landscape:
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA includes a broad range of changes to U.S. tax law, which did not have a material impact on our total tax provision as of September 26, 2026, and we do not expect the elective provisions of the law to have a material impact on our effective tax rate in future periods. Further, certain provisions of the OBBBA impact the timing of cash tax payments, which resulted in a reduction of our cash tax payments in 2025, and is expected to reduce cash tax payments in 2026, However, we do not expect these provisions to have a material impact on our cash flows in future periods.
The OBBBA also enacted modifications to the Supplemental Nutrition Assistance Program (“SNAP”). As of the third quarter of 2026, the modifications have resulted in a reduction of the number of SNAP participants and the average benefits received by the eligible participants, which has, and may continue to have, a negative impact on consumers’ demand for our products. While we have taken measures to attempt to mitigate these negative impacts, these modifications to the SNAP program may continue to have a negative impact on our results of operations, cash flows, and market share.
Previously Announced Separation Transaction:
On September 2, 2025, we announced a plan to separate the Company into two independent, publicly traded companies through a tax-free spin-off (the “Separation”). On February 11, 2026, we announced that the Kraft Heinz Board of Directors (the “Board”) has decided to pause work related to the Separation. If work related to the Separation is resumed, the Separation would be subject to the satisfaction of customary conditions, including final approval by the Board, receipt of favorable tax opinions of our U.S. tax advisors with respect to the tax-free nature of the Separation, and the effectiveness of appropriate filings with the SEC. The timing of the Separation and whether it will be completed is uncertain and we cannot assure that the Separation will be completed on the anticipated timeline or at all or that the terms of the Separation will not change. We incurred $24 million of separation costs for the three months and $90 million of separation costs for the nine months ended September 26, 2026. We incurred $17 million of separation costs for the three and nine months ended September 27, 2025. The costs incurred in 2026 primarily related to consulting and advisory services, technology costs, and employee-related costs. These costs were recognized in SG&A on our consolidated statements of income.
Results of Operations
We disclose in this report certain non-GAAP financial measures. These non-GAAP financial measures assist management 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. For additional information and reconciliations to the most closely comparable financial measures presented in our condensed consolidated financial statements, which are calculated in accordance with U.S. GAAP, see Non-GAAP Financial Measures.
Consolidated Results of Operations
Summary of Results:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions, except per share data) | (in millions, except per share data) | ||||||||||||||||||||||||||||||||||
| Net sales | $ | 6,115 | $ | 6,237 | (2.0) | % | $ | 18,424 | $ | 18,588 | (0.9) | % | |||||||||||||||||||||||
| Operating income/(loss) | 875 | 1,025 | (14.6) | % | (4,411) | (5,753) | 23.3 | % | |||||||||||||||||||||||||||
| Net income/(loss) | 536 | 613 | (12.6) | % | (4,125) | (6,496) | 36.5 | % | |||||||||||||||||||||||||||
| Net income/(loss) attributable to common shareholders | 544 | 615 | (11.5) | % | (4,118) | (6,497) | 36.6 | % | |||||||||||||||||||||||||||
| Diluted EPS | 0.46 | 0.52 | (11.5) | % | (3.47) | (5.47) | 36.6 | % | |||||||||||||||||||||||||||
38
Net Sales:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Net sales | $ | 6,115 | $ | 6,237 | (2.0) | % | $ | 18,424 | $ | 18,588 | (0.9) | % | |||||||||||||||||||||||
Organic Net Sales(a) | 6,109 | 6,173 | (1.1) | % | 18,235 | 18,404 | (0.9) | % | |||||||||||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Net sales decreased 2.0% to $6.1 billion for the three months ended September 26, 2026 compared to $6.2 billion for the three months ended September 27, 2025, including the unfavorable impact of acquisitions and divestitures (0.6 pp), and the unfavorable impact of foreign currency (0.3 pp). Organic Net Sales decreased 1.1% to $6.1 billion for the three months ended September 26, 2026 compared to $6.2 billion for the three months ended September 27, 2025, primarily due to unfavorable volume/mix (1.1 pp). Volume/mix in North America and Europe and Pacific Developed Markets was unfavorable, while volume/mix in Emerging Markets was favorable. Pricing was lower in North America and Europe and Pacific Developed Markets, offset by higher pricing in Emerging Markets.
Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Net sales decreased 0.9% to $18.4 billion for the nine months ended September 26, 2026 compared to $18.6 billion for the nine months ended September 27, 2025, including the favorable impacts of foreign currency (0.7 pp) and unfavorable acquisitions and divestitures (0.7 pp). Organic Net Sales decreased 0.9% to $18.2 billion for the nine months ended September 26, 2026 compared to $18.4 billion for the nine months ended September 27, 2025, primarily due to unfavorable volume/mix (1.7 pp), which more than offset higher pricing (0.8 pp). Pricing was higher in North America and Emerging Markets, while pricing in Europe and Pacific Developed Markets was flat. Volume/mix in North America and Europe and Pacific Developed Markets was unfavorable, while volume/mix in Emerging Markets was favorable.
Net Income/(Loss):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Operating income/(loss) | $ | 875 | $ | 1,025 | (14.6) | % | $ | (4,411) | $ | (5,753) | 23.3 | % | |||||||||||||||||||||||
| Net income/(loss) | 536 | 613 | (12.6) | % | (4,125) | (6,496) | 36.5 | % | |||||||||||||||||||||||||||
| Net income/(loss) attributable to common shareholders | 544 | 615 | (11.5) | % | (4,118) | (6,497) | 36.6 | % | |||||||||||||||||||||||||||
Adjusted Operating Income(a) | 939 | 1,106 | (15.2) | % | 3,038 | 3,581 | (15.2) | % | |||||||||||||||||||||||||||
(a) Adjusted Operating Income is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Operating income/(loss) decreased 14.6% to income of $875 million for the three months ended September 26, 2026 compared to income of $1.0 billion for the three months ended September 27, 2025, primarily due to higher variable compensation and related tax expense, non-cash impairment losses that were $37 million higher in the current year period, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, unfavorable volume/mix, and increased people costs. These unfavorable impacts to operating income/(loss) were partially offset by favorable changes in unrealized losses/(gains) on commodity hedges and efficiency initiatives in procurement that outpaced inflationary pressures.
39
Net income/(loss) decreased 12.6% to income of $536 million for the three months ended September 26, 2026 compared to income of $613 million for the three months ended September 27, 2025. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above, partially offset by lower interest expense, lower income tax expense, and favorable changes in other expense/(income).
•Our effective tax rate for the three months ended September 26, 2026 was an expense of 23.8% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill impairment losses of 2.0%. Our effective tax rate for the three months ended September 27, 2025 was an expense of 24.0% on pre-tax income. The year-over-year change in the effective tax rate for the three-month period was primarily due to the impact of certain discrete deferred tax adjustments and a more favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.
•Interest expense/(income) was $210 million of expense for the three months ended September 26, 2026 compared to $240 million of expense for the three months ended September 27, 2025. Interest expense decreased due to lower debt balances and lower interest rates, reflecting debt prepayments and tender offers executed in the second and third quarters of 2026, as well as the refinancing of maturing higher-rate debt at lower interest rates.
•Other expense/(income) was $39 million of income for the three months ended September 26, 2026 compared to $22 million of income for the three months ended September 27, 2025. This change was primarily driven by a $2 million net loss on the sale of a business recognized in 2026 compared to a $44 million net loss on the sale of a business recognized in 2025, partially offset by a $10 million unfavorable change in interest income.
Adjusted Operating Income decreased 15.2% to $939 million for the three months ended September 26, 2026 compared to $1.1 billion for the three months ended September 27, 2025, primarily due to higher variable compensation and related tax expenses, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, unfavorable volume/mix, increased people costs, and increased research and development costs. These unfavorable impacts more than offset efficiency initiatives in procurement that outpaced inflationary pressures.
Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Operating income/(loss) decreased 23.3% to a loss of $4.4 billion for the nine months ended September 26, 2026 compared to a loss of $5.8 billion for the nine months ended September 27, 2025, primarily driven by non-cash impairment losses that were $1.9 billion lower in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased by $522 million due to increased advertising expense, higher variable compensation and related tax expense, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, separation costs, and unfavorable volume/mix. These unfavorable impacts to operating income/(loss) were partially offset by higher pricing, favorable changes in unrealized losses/(gains) on commodity hedges, and efficiency initiatives in procurement that outpaced inflationary pressures.
Net income/(loss) decreased 36.5% to a loss of $4.1 billion for the nine months ended September 26, 2026 compared to a loss of $6.5 billion for the nine months ended September 27, 2025. This decrease was driven by the favorable changes in operating income/(loss) factors discussed above, lower income tax expense, lower interest expense, and favorable changes in other expense/(income).
•Our effective tax rate for the nine months ended September 26, 2026 was a benefit of 11.5% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill impairment losses of 12.7%. Our effective tax rate for the nine months ended September 27, 2025 was an expense of 2.4% on pre-tax loss, which included the net unfavorable effective tax rate impact of non-deductible goodwill impairments of 24.8%. The year-over-year change in the effective tax rate for the nine month period was primarily due to the impact of non-deductible goodwill impairments and a more favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.
•Interest expense/(income) was $415 million of expense for the nine months ended September 26, 2026 compared to $709 million of expense for the nine months ended September 27, 2025. This change was primarily driven by a $265 million gain on extinguishment of debt in connection with the Tender Offer.
•Other expense/(income) was $164 million of income for the nine months ended September 26, 2026 compared to $120 million of income for the nine months ended September 27, 2025. This change was primarily driven by a $45 million favorable change in net pension and postretirement non-service benefits related to the settlement of our U.S. Retiree Life Insurance Plan in the first quarter of 2026 and a $1 million net gain on the sale of a business recognized in 2026 compared to a $44 million net loss on the sale of a business recognized in 2025, partially offset by a loss from an interest rate hedge of $37 million.
40
Adjusted Operating Income decreased 15.2% to $3.0 billion for the nine months ended September 26, 2026 compared to $3.6 billion for the nine months ended September 27, 2025, primarily due to increased advertising expenses, higher variable compensation and related tax expenses, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, and unfavorable volume/mix. These unfavorable impacts were partially offset by higher pricing and efficiency initiatives in procurement that outpaced inflationary pressures.
Diluted EPS:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| Diluted EPS | $ | 0.46 | $ | 0.52 | (11.5) | % | $ | (3.47) | $ | (5.47) | 36.6 | % | |||||||||||||||||||||||
Adjusted EPS(a) | 0.53 | 0.61 | (13.1) | % | 1.67 | 1.92 | (13.0) | % | |||||||||||||||||||||||||||
(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Diluted EPS decreased 11.5% to $0.46 for the three months ended September 26, 2026 compared to $0.52 for the three months ended September 27, 2025, primarily due to the net income/(loss) factors discussed above.
| For the Three Months Ended | |||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | $ Change | % Change | ||||||||||||||||||||
| Diluted EPS | $ | 0.46 | $ | 0.52 | $ | (0.06) | (11.5) | % | |||||||||||||||
| Restructuring activities | 0.01 | — | 0.01 | ||||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (0.02) | 0.02 | (0.04) | ||||||||||||||||||||
| Impairment losses | 0.06 | 0.03 | 0.03 | ||||||||||||||||||||
| Separation costs | 0.01 | 0.01 | — | ||||||||||||||||||||
| Losses/(gains) on sale of business | — | 0.04 | (0.04) | ||||||||||||||||||||
| Nonmonetary currency devaluation | 0.01 | — | 0.01 | ||||||||||||||||||||
| Certain significant discrete income tax items | — | (0.01) | 0.01 | ||||||||||||||||||||
Adjusted EPS(a) | $ | 0.53 | $ | 0.61 | $ | (0.08) | (13.1) | % | |||||||||||||||
Key drivers of change in Adjusted EPS(a): | |||||||||||||||||||||||
| Results of operations | $ | (0.10) | |||||||||||||||||||||
| Interest expense | 0.02 | ||||||||||||||||||||||
| Other expense/(income) | (0.01) | ||||||||||||||||||||||
| Effective tax rate | 0.01 | ||||||||||||||||||||||
| $ | (0.08) | ||||||||||||||||||||||
(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Adjusted EPS decreased 13.1% to $0.53 for the three months ended September 26, 2026 compared to $0.61 for the three months ended September 27, 2025. This decrease was primarily due to lower Adjusted Operating Income and unfavorable changes in other expense/(income), which more than offset lower interest expense and lower taxes on adjusted earnings.
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Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Diluted EPS increased 36.6% to $(3.47) for the nine months ended September 26, 2026 compared to $(5.47) for the nine months ended September 27, 2025, primarily due to the net income/(loss) factors discussed above.
For the Nine Months Ended | |||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | $ Change | % Change | ||||||||||||||||||||
| Diluted EPS | $ | (3.47) | $ | (5.47) | $ | 2.00 | 36.6 | % | |||||||||||||||
| Restructuring activities | — | 0.01 | (0.01) | ||||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (0.07) | — | (0.07) | ||||||||||||||||||||
| Impairment losses | 5.30 | 7.30 | (2.00) | ||||||||||||||||||||
| Separation costs | 0.05 | 0.01 | 0.04 | ||||||||||||||||||||
| Losses/(gains) on sale of business | (0.02) | 0.04 | (0.06) | ||||||||||||||||||||
| Nonmonetary currency devaluation | 0.02 | 0.02 | — | ||||||||||||||||||||
| Debt prepayment and extinguishment (benefit)/costs | (0.14) | — | (0.14) | ||||||||||||||||||||
| Certain significant discrete income tax items | — | 0.01 | (0.01) | ||||||||||||||||||||
Adjusted EPS(a) | $ | 1.67 | $ | 1.92 | $ | (0.25) | (13.0) | % | |||||||||||||||
Key drivers of change in Adjusted EPS(a): | |||||||||||||||||||||||
| Results of operations | $ | (0.33) | |||||||||||||||||||||
| Interest expense | 0.01 | ||||||||||||||||||||||
| Effective tax rate | 0.07 | ||||||||||||||||||||||
| $ | (0.25) | ||||||||||||||||||||||
(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Adjusted EPS decreased 13.0% to $1.67 for the nine months ended September 26, 2026 compared to $1.92 for the nine months ended September 27, 2025. This decrease was primarily due to lower Adjusted Operating Income, which more than offset lower taxes on adjusted earnings and lower interest expense.
Results of Operations by Segment
We manage our operating results through three operating segments, all of which are reportable segments: North America, Europe and Pacific Developed Markets, and Emerging Markets.
Management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted Operating Income. 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, separation costs, and certain non-ordinary course legal and regulatory matters. 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.
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. Exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in other expense/(income) on our condensed consolidated statements of income, as nonmonetary currency devaluation, rather than accumulated other comprehensive income/(losses) on our condensed consolidated balance sheets, until such time as the economy is no longer considered highly inflationary. See Note 2, Significant Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 27, 2025, for additional information. We apply highly inflationary accounting to the results of our subsidiaries in Venezuela, Turkey, and Egypt, which are all in our Emerging Markets segment.
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Net Sales:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| North America | $ | 4,485 | $ | 4,641 | $ | 13,569 | $ | 13,886 | |||||||||||||||
| Europe and Pacific Developed Markets | 910 | 964 | 2,757 | 2,813 | |||||||||||||||||||
| Emerging Markets | 720 | 632 | 2,098 | 1,889 | |||||||||||||||||||
| Total net sales | $ | 6,115 | $ | 6,237 | $ | 18,424 | $ | 18,588 | |||||||||||||||
Organic Net Sales:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
Organic Net Sales(a): | |||||||||||||||||||||||
| North America | $ | 4,493 | $ | 4,641 | $ | 13,557 | $ | 13,886 | |||||||||||||||
| Europe and Pacific Developed Markets | 912 | 923 | 2,667 | 2,690 | |||||||||||||||||||
| Emerging Markets | 704 | 609 | 2,011 | 1,828 | |||||||||||||||||||
| Total Organic Net Sales | $ | 6,109 | $ | 6,173 | $ | 18,235 | $ | 18,404 | |||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Drivers of the changes in net sales and Organic Net Sales for the three and nine months ended September 26, 2026 compared to the three and nine months ended September 27, 2025 were:
| Net Sales | Currency | Acquisitions and Divestitures | Organic Net Sales | Price | Volume/Mix | ||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| North America | (3.4) | % | (0.2) pp | 0.0 pp | (3.2) | % | (0.8) pp | (2.4) pp | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | (5.6) | % | (0.1) pp | (4.2) pp | (1.3) | % | (0.4) pp | (0.9) pp | |||||||||||||||||||||||||||
Emerging Markets | 13.8 | % | (1.8) pp | 0.0 pp | 15.6 | % | 7.2 pp | 8.4 pp | |||||||||||||||||||||||||||
| Kraft Heinz | (2.0) | % | (0.3) pp | (0.6) pp | (1.1) | % | 0.0 pp | (1.1) pp | |||||||||||||||||||||||||||
| Net Sales | Currency | Acquisitions and Divestitures | Organic Net Sales | Price | Volume/Mix | ||||||||||||||||||||||||||||||
For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
| North America | (2.3) | % | 0.1 pp | 0.0 pp | (2.4) | % | 0.2 pp | (2.6) pp | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | (2.0) | % | 3.2 pp | (4.3) pp | (0.9) | % | 0.0 pp | (0.9) pp | |||||||||||||||||||||||||||
Emerging Markets | 11.1 | % | 1.1 pp | 0.0 pp | 10.0 | % | 5.8 pp | 4.2 pp | |||||||||||||||||||||||||||
| Kraft Heinz | (0.9) | % | 0.7 pp | (0.7) pp | (0.9) | % | 0.8 pp | (1.7) pp | |||||||||||||||||||||||||||
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Adjusted Operating Income:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Segment Adjusted Operating Income: | |||||||||||||||||||||||
| North America | $ | 911 | $ | 1,018 | $ | 2,873 | $ | 3,292 | |||||||||||||||
| Europe and Pacific Developed Markets | 96 | 143 | 380 | 435 | |||||||||||||||||||
| Emerging Markets | 81 | 66 | 256 | 236 | |||||||||||||||||||
| General corporate expenses | (149) | (121) | (471) | (382) | |||||||||||||||||||
| Restructuring activities | (7) | (6) | (38) | (10) | |||||||||||||||||||
| Unrealized gains/(losses) on commodity hedges | 39 | (23) | 116 | (6) | |||||||||||||||||||
| Impairment losses | (72) | (35) | (7,437) | (9,301) | |||||||||||||||||||
| Separation costs | (24) | (17) | (90) | (17) | |||||||||||||||||||
| Operating income/(loss) | 875 | 1,025 | (4,411) | (5,753) | |||||||||||||||||||
| Interest expense/(income) | 210 | 240 | 415 | 709 | |||||||||||||||||||
| Other expense/(income) | (39) | (22) | (164) | (120) | |||||||||||||||||||
| Income/(loss) before income taxes | $ | 704 | $ | 807 | $ | (4,662) | $ | (6,342) | |||||||||||||||
North America:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Net sales | $ | 4,485 | $ | 4,641 | (3.4) | % | $ | 13,569 | $ | 13,886 | (2.3) | % | |||||||||||||||||||||||
Organic Net Sales(a) | 4,493 | 4,641 | (3.2) | % | 13,557 | 13,886 | (2.4) | % | |||||||||||||||||||||||||||
Segment Adjusted Operating Income | 911 | 1,018 | (10.5) | % | 2,873 | 3,292 | (12.7) | % | |||||||||||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Net sales decreased 3.4% to $4.5 billion for the three months ended September 26, 2026 compared to $4.6 billion for the three months ended September 27, 2025. Organic Net Sales decreased 3.2% to $4.5 billion for the three months ended September 26, 2026 compared to $4.6 billion for the three months ended September 27, 2025, primarily due to unfavorable volume/mix (2.4 pp) and lower pricing (0.8 pp). Unfavorable volume/mix was primarily due to declines in meats, sauces, and refreshment beverages, in part as retailers accelerated purchases into the second quarter and further reduced inventory in the third quarter. Lower pricing was primarily due to price investments in cream cheese and meats, partially offset by higher pricing in refreshment beverages to mitigate higher input costs.
Segment Adjusted Operating Income decreased 10.5% to $911 million for the three months ended September 26, 2026 compared to $1.0 billion for the three months ended September 27, 2025, primarily due to unfavorable volume/mix, lower pricing, higher variable compensation and related tax expenses, increased people cost, and inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives. These unfavorable impacts to Segment Adjusted Operating Income more than offset efficiency initiatives in procurement that outpaced inflationary pressures.
Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Net sales decreased 2.3% to $13.6 billion for the nine months ended September 26, 2026 compared to $13.9 billion for the nine months ended September 27, 2025, including the favorable impacts of foreign currency (0.1 pp). Organic Net Sales decreased 2.4% to $13.6 billion for the nine months ended September 26, 2026 compared to $13.9 billion for the nine months ended September 27, 2025, primarily due to unfavorable volume/mix (2.6 pp), which more than offset higher pricing (0.2 pp). Unfavorable volume/mix was primarily due to declines in meats, refreshment beverages, certain condiments, and coffee. Higher pricing was taken in certain categories to mitigate higher input costs, primarily in refreshment beverages and coffee.
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Segment Adjusted Operating Income decreased 12.7% to $2.9 billion for the nine months ended September 26, 2026 compared to $3.3 billion for the nine months ended September 27, 2025, primarily due to unfavorable volume/mix, increased advertising expense, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, higher variable compensation and related tax expenses, and increased research and development expenditures. These unfavorable impacts to Segment Adjusted Operating Income more than offset efficiency initiatives in procurement that outpaced inflationary pressures and higher pricing.
Europe and Pacific Developed Markets:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Net sales | $ | 910 | $ | 964 | (5.6) | % | $ | 2,757 | $ | 2,813 | (2.0) | % | |||||||||||||||||||||||
Organic Net Sales(a) | 912 | 923 | (1.3) | % | 2,667 | 2,690 | (0.9) | % | |||||||||||||||||||||||||||
Segment Adjusted Operating Income | 96 | 143 | (32.8) | % | 380 | 435 | (12.6) | % | |||||||||||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Net sales decreased 5.6% to $910 million for the three months ended September 26, 2026 compared to $964 million for the three months ended September 27, 2025, including the unfavorable impact of acquisitions and divestitures (4.2 pp) and the unfavorable impacts of foreign currency (0.1 pp). Organic Net Sales decreased 1.3% to $912 million for the three months ended September 26, 2026 compared to $923 million for the three months ended September 27, 2025, primarily due to unfavorable volume/mix (0.9 pp) and lower pricing (0.4 pp). Unfavorable volume/mix was primarily due to portfolio and network simplification as well as competitive pressures in Australia and New Zealand, which more than offset favorable volume/mix in the United Kingdom and Germany. Lower pricing was primarily due to price investments in the United Kingdom.
Segment Adjusted Operating Income decreased 32.8% to $96 million for the three months ended September 26, 2026 compared to $143 million for the three months ended September 27, 2025, primarily due to increased variable compensation and related tax expenses, spare parts write offs, and increased advertising expenses.
Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Net sales decreased 2.0% to $2.8 billion for the nine months ended September 26, 2026 compared to $2.8 billion for the nine months ended September 27, 2025, including the unfavorable impact of acquisitions and divestitures (4.3 pp) and the favorable impacts of foreign currency (3.2 pp). Organic Net Sales decreased 0.9% to $2.7 billion for the nine months ended September 26, 2026 compared to $2.7 billion for the nine months ended September 27, 2025, primarily due to unfavorable volume/mix (0.9 pp). Unfavorable volume/mix was primarily due to portfolio and network simplification as well as competitive pressures in Australia and New Zealand, which more than offset favorable volume/mix in the United Kingdom, Benelux, and France.
Segment Adjusted Operating Income decreased 12.6% to $380 million for the nine months ended September 26, 2026 compared to $435 million for the nine months ended September 27, 2025, primarily due to increased advertising expenses, increased costs related to variable compensation and related tax expenses, the Italy Infant Transaction, and spare parts write offs. These unfavorable impacts to Segment Adjusted Operating Income more than offset efficiency initiatives in procurement that outpaced inflationary pressures.
45
Emerging Markets:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | % Change | September 26, 2026 | September 27, 2025 | % Change | ||||||||||||||||||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||||||||||||||||||||
| Net sales | $ | 720 | $ | 632 | 13.8 | % | $ | 2,098 | $ | 1,889 | 11.1 | % | |||||||||||||||||||||||
Organic Net Sales(a) | 704 | 609 | 15.6 | % | 2,011 | 1,828 | 10.0 | % | |||||||||||||||||||||||||||
| Segment Adjusted Operating Income | 81 | 66 | 22.5 | % | 256 | 236 | 8.1 | % | |||||||||||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.
Three Months Ended September 26, 2026 Compared to the Three Months Ended September 27, 2025:
Net sales increased 13.8% to $720 million for the three months ended September 26, 2026 compared to $632 million for the three months ended September 27, 2025, including the unfavorable impacts of foreign currency (1.8 pp). Organic Net Sales increased 15.6% to $704 million for the three months ended September 26, 2026 compared to $609 million for the three months ended September 27, 2025, primarily driven by favorable volume/mix (8.4 pp) and higher pricing (7.2 pp). Favorable volume/mix was driven primarily by Indonesia, Brazil, and Venezuela. Pricing was higher in EurAsia and LATAM to mitigate inflationary pressures.
Segment Adjusted Operating Income increased 22.5% to $81 million for the three months ended September 26, 2026 compared to $66 million for the three months ended September 27, 2025, primarily driven by higher pricing and favorable volume/mix. These favorable impacts to Segment Adjusted Operating Income more than offset increased inflationary pressures in procurement, manufacturing, and logistics costs that outpaced our efficiency initiatives, and increased SG&A, primarily due to increased advertising expenses.
Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025
Net sales increased 11.1% to $2.1 billion for the nine months ended September 26, 2026 compared to $1.9 billion for the nine months ended September 27, 2025, including the favorable impacts of foreign currency (1.1 pp). Organic Net Sales increased 10.0% to $2.0 billion for the nine months ended September 26, 2026 compared to $1.8 billion for the nine months ended September 27, 2025, primarily driven by higher pricing (5.8 pp), and favorable volume/mix (4.2 pp). Pricing was higher in EurAsia and LATAM to mitigate inflationary pressures. Favorable volume/mix was primarily driven by Brazil, Venezuela, and China, which more than offset unfavorable volume/mix in Indonesia.
Segment Adjusted Operating Income increased 8.1% to $256 million for the nine months ended September 26, 2026 compared to $236 million for the nine months ended September 27, 2025, primarily driven by higher pricing, favorable volume/mix, and indirect tax recoveries within Brazil. These favorable impacts to Segment Adjusted Operating Income more than offset inflationary pressures in procurement, manufacturing, and logistics costs that outpaced our efficiency initiatives, increased advertising expenses, and higher variable compensation and related tax expenses.
Liquidity and Capital Resources
We believe that cash generated from our operating activities, as well as our access to other potential sources of liquidity including our available-for-sale debt securities, commercial paper programs, and our Senior Credit Facility will provide sufficient liquidity to meet our working capital needs, repayments of long-term debt, future contractual obligations, payment of our anticipated quarterly dividends, planned capital expenditures, restructuring expenditures, and contributions to our postemployment benefit plans for the next 12 months. An additional potential source of liquidity is access to capital markets. We intend to use our cash on hand and commercial paper programs for daily funding requirements.
Cash Flow Activity for the Nine Months Ended September 26, 2026 Compared to the Nine Months Ended September 27, 2025:
Net Cash Provided by/Used for Operating Activities:
Net cash provided by operating activities was $3.0 billion for the nine months ended September 26, 2026 compared to $3.1 billion for the nine months ended September 27, 2025. This decrease was driven by lower Adjusted Operating Income, partially offset by favorable changes in working capital. The changes in working capital were driven by favorable changes in accounts payable, which were partially offset by higher cash outflows for inventory related to stock rebuilding and increased input costs, and higher cash outflows for advertising.
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Net Cash Provided by/Used for Investing Activities:
Net cash provided by investing activities was $651 million for the nine months ended September 26, 2026 compared to net cash used for investing activities of $1.6 billion for the nine months ended September 27, 2025. This change was primarily driven by higher purchases of marketable securities in the prior year period, proceeds received on the sale of marketable securities in 2026, and proceeds received in connection with the close of the Italy Infant Transaction. We expect 2026 capital expenditures to be approximately $800 million compared to the 2025 capital expenditures of $801 million. Our 2026 capital expenditures are expected to be primarily driven by maintenance projects, investments in technology, and capital investments focused on generating growth.
Net Cash Provided by/Used for Financing Activities:
Net cash used for financing activities was $4.4 billion for the nine months ended September 26, 2026 compared to net cash used for financing activities of $763 million for the nine months ended September 27, 2025. This change was primarily driven by higher debt repayments in the current year period, lower debt proceeds received from the issuance of the 2026 Notes in the current year period compared to 2025 Notes in the prior year period, and decreased hedge settlements. This change was partially offset by decreased repurchases of common stock compared to the prior year period. See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements for additional information on our debt repayments.
Cash Held by International Subsidiaries:
Of the $1.9 billion cash and cash equivalents on our condensed consolidated balance sheets at September 26, 2026, $1.3 billion 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. For those undistributed earnings considered to be indefinitely reinvested, our intent is to reinvest these funds in our international operations, and our current plans do not demonstrate a need to repatriate the accumulated earnings to fund our U.S. cash requirements. The amount of unrecognized deferred tax liabilities for local country withholding taxes that would be owed, if repatriated, related to our 2018 through 2026 accumulated earnings of certain international subsidiaries is approximately $70 million.
Trade Payables Programs:
In order to manage our cash flow and related liquidity, we work with our suppliers to optimize our terms and conditions, which
include the extension of payment terms. 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. Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 250 days. All amounts due to participating suppliers are paid to the third party on the original invoice due dates, regardless of whether a particular invoice was sold. The amounts confirmed outstanding under these programs were $892 million at September 26, 2026 and $755 million at December 27, 2025. The amounts were included in accounts payable on our consolidated balance sheets. See Note 13, Financing Arrangements, in Item 1, Financial Statements, for additional information on our trade payables programs.
Borrowing Arrangements:
As of the date of this filing, our long-term debt is rated BBB with a negative outlook from S&P Global Ratings and Fitch Ratings, and Baa2 with a stable outlook from Moody’s Investor Services, Inc.
From time to time, we obtain funding through our commercial paper programs. We had no commercial paper outstanding at September 26, 2026, at December 27, 2025, or during the nine months ended September 26, 2026 or September 27, 2025.
Our Senior Credit Facility provides for a revolving commitment of $4.0 billion through July 8, 2031. Subject to certain conditions, we may increase the amount of revolving commitments and/or add tranches of term loans in a combined aggregate amount of up to $1.0 billion.
No amounts were drawn on our Senior Credit Facility at September 26, 2026 or December 27, 2025, or during the nine months ended September 26, 2026 or September 27, 2025.
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 September 26, 2026.
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Long-Term Debt:
Our long-term debt, including the current portion, was $18.0 billion at September 26, 2026 and $21.2 billion at December 27, 2025. This decrease was primarily related to the repayment of our $1.9 billion senior notes due June 2026, the purchase of approximately $1.4 billion aggregate principal amount of the 2046 Notes that was validly tendered in May 2026, the partial redemption of $1.0 billion aggregate principal amount of the 3.875% Senior Notes due May 2027, and changes in foreign currency exchange rates on our foreign-denominated debt which was partially offset by the issuance of the 2026 Notes. We used available-for-sale securities to repay the senior notes that matured in June 2026 and used the net proceeds from the 2026 Notes to fund the Tender Offer.
In the second quarter of 2026, KHFC, our 100% owned operating subsidiary, issued 500 million euro aggregate principal amount of 3.500% senior notes due May 2031, and 500 million euro aggregate principal amount of 3.950% senior notes due May 2034.
In July 2026, we partially redeemed $1 billion aggregate principal amount of the 3.875% Senior Notes due May 2027, resulting in an aggregate principal amount of senior notes of approximately $350 million maturing in May 2027.
Additionally, we have aggregate principal amounts of senior notes of approximately 400 million British pound sterling maturing in July 2027.
We may from time to time seek to retire or purchase our outstanding debt through redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately negotiated transactions, Rule 10b5-1 plans, or otherwise.
Our long-term debt contains customary representations, covenants, and events of default. We were in compliance with all financial covenants as of September 26, 2026.
See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, for additional information on our long-term debt activity, Note 11, Financial Instruments, in Item 1, Financial Statements, for additional information on our available-for-sale securities, and Note 17, Debt, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 27, 2025 for additional information on our borrowing arrangements and long-term debt.
Equity and Dividends:
We paid dividends on our common stock of $1.4 billion for the nine months ended September 26, 2026. Additionally, in the fourth quarter of 2026, our Board of Directors declared a cash dividend of $0.40 per share of common stock, which is payable on December 23, 2026 to stockholders of record on December 4, 2026.
The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net income, financial condition, cash requirements, future prospects, and other factors that our Board of Directors deems relevant to its analysis and decision making.
On November 27, 2023, we announced that the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $3.0 billion, exclusive of fees, of the Company’s common stock through December 26, 2026. We are not obligated to repurchase any specific number of shares and the program may be modified, suspended, or discontinued at any time. Under the program, shares may be repurchased in open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), privately negotiated transactions, transactions structured through investment banking institutions, or other means. No shares were purchased under the share repurchase program during the three and nine months ended September 26, 2026 and had approximately $1.5 billion remaining authorization under the share repurchase program as of September 26, 2026. The share repurchase program is in addition to our share repurchases to offset the dilutive effect of equity-based compensation.
Aggregate Contractual Obligations:
In the nine months ended September 26, 2026, we repaid $1.9 billion in aggregate principal amount of senior notes that matured in the period, purchased approximately $1.4 billion aggregate principal amount of the 2046 Notes that were validly tendered in the Tender Offer, issued the 2026 Notes, and we partially redeemed $1 billion aggregate principal amount of the 3.875% Senior Notes due May 2027 at a redemption price of $1 billion. See Note 14. Commitments, Contingencies, and Debt, in Item 1. Financial Statements, for additional information.
There were no other material changes to our aggregate contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 27, 2025.
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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 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, and Note 17, Debt, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 27, 2025 for additional descriptions of these guarantees.
The payment of the principal, interest and premium, when applicable, on the KHFC Senior Notes is fully and unconditionally guaranteed on a senior unsecured basis by the Parent Guarantor, pursuant to the terms and conditions of the applicable indenture. None of the Parent Guarantor’s subsidiaries guarantee the KHFC Senior Notes.
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.
The KHFC Senior Notes are obligations exclusively of KHFC and the Parent Guarantor and not of any of the Parent Guarantor’s other subsidiaries. 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. Except to the extent the Parent Guarantor is a creditor with recognized claims against its subsidiaries, all claims of creditors (including trade creditors) and holders of preferred stock, if any, of its subsidiaries will have priority with respect to the assets of such subsidiaries over its claims (and therefore the claims of its creditors, including holders of the KHFC Senior Notes). Consequently, the KHFC Senior Notes are structurally subordinated to all liabilities of the Parent Guarantor’s subsidiaries and any subsidiaries that it may in the future acquire or establish. The obligations of the Parent Guarantor will terminate and be of no further force or effect in the following circumstances: (i) (a) KHFC’s exercise of its legal defeasance option or, except in the case of a guarantee of any direct or indirect parent of KHFC, covenant defeasance option in accordance with the applicable indenture, or KHFC’s obligations under the applicable indenture have been discharged in accordance with the terms of the applicable indenture or (b) as specified in a supplemental indenture to the applicable indenture; and (ii) the Parent Guarantor has delivered to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the applicable indenture have been complied with. The Guarantee is limited by its terms to an amount not to exceed the maximum amount that can be guaranteed by the Parent Guarantor without rendering the Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
The following tables present summarized financial information for the Parent Guarantor and KHFC (as subsidiary issuer of the KHFC Senior Notes) (together, the “Obligor Group”), on a combined basis after the elimination of all intercompany balances and transactions between the Parent Guarantor and subsidiary issuer and investments in any subsidiary that is a non-guarantor.
Summarized Statement of Income
| For the Nine Months Ended | |||||
| September 26, 2026 | |||||
| Net sales | $ | 11,421 | |||
Gross profit(a) | 4,307 | ||||
| Intercompany service fees and other recharges | 3,004 | ||||
| Operating income/(loss) | 735 | ||||
| Equity in earnings/(losses) of subsidiaries | (4,384) | ||||
| Net income/(loss) | (4,118) | ||||
| Net income/(loss) attributable to common shareholders | (4,118) | ||||
(a) For the nine months ended September 26, 2026, the Obligor Group recorded $360 million of net sales to the non-guarantor subsidiaries and $67 million of purchases from the non-guarantor subsidiaries.
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Summarized Balance Sheets
| September 26, 2026 | December 27, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets | $ | 4,699 | $ | 6,336 | |||||||
Current assets due from affiliates(a) | 190 | 269 | |||||||||
| Non-current assets | 5,578 | 5,648 | |||||||||
| Goodwill | 8,823 | 8,823 | |||||||||
| Intangible assets, net | 1,684 | 1,768 | |||||||||
Non-current assets due from affiliates(b) | 22 | 28 | |||||||||
| LIABILITIES | |||||||||||
| Current liabilities | $ | 4,757 | $ | 5,211 | |||||||
Current liabilities due to affiliates(a) | 1,167 | 1,122 | |||||||||
| Non-current liabilities | 18,871 | 21,260 | |||||||||
Non-current liabilities due to affiliates(b) | 204 | 208 | |||||||||
(a) Represents receivables and short-term lending due from and payables and short-term lending due to non-guarantor subsidiaries.
(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, meats, sugar and other sweeteners, edible oils, coffee, tomatoes, wheat products, fruits and vegetables, and eggs to manufacture our products. In addition, we purchase and use significant quantities of resins, cardboard, plastics, glass, paper, 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 global supply and cost trends of these commodities.
During the nine months ended September 26, 2026, we experienced decreased commodity costs for cheese and dairy products, meats, coffee, sugar and other sweeteners, and eggs while commodity costs for edible oils, resins, plastics, and fruits and vegetables increased compared to the prior year period. We manage commodity cost volatility primarily through pricing and risk management strategies including utilizing a range of commodity 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. As a result of these risk management strategies, our commodity costs may not immediately correlate with market price trends.
See our Annual Report on Form 10-K for the year ended December 27, 2025 for additional information on how we manage commodity costs.
Critical Accounting Estimates
Our significant accounting policies are described in Note 2, Significant Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 27, 2025.
We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments, and assumptions. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 27, 2025 for a discussion of our critical accounting estimates and assumptions.
Goodwill and Intangible Assets:
As of September 26, 2026, we maintain 12 reporting units globally, six of which comprise our goodwill balance. These six reporting units had an aggregate goodwill carrying amount of $19.6 billion at September 26, 2026. Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $29.2 billion as of September 26, 2026.
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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. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections, disposals of significant brands or components of our business, unexpected business disruptions (for example due to a natural disaster, pandemic, or loss of a customer, supplier, or other significant business relationship), unexpected significant declines in operating results, significant adverse changes in the markets in which we operate, changes in income tax rates, changes in interest rates, or changes in management strategy. We test reporting units for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. We test brands for impairment by comparing the estimated fair value of each brand with its carrying amount. 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. See Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, for a discussion of the timing of the annual impairment test.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units and brands requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions, and to consider the market multiples of certain peer and guideline companies. 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 considerations, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors. As part of their latest impairment test, we used discount rates ranging from 6.8% to 13.5% and long-term growth rates ranging from 0.0% to 4.0% in estimating the fair value of our reporting units. Additionally, we used discount rates ranging from 8.1% to 10.3%, long-term growth rates ranging from 0.0% to 4.0%, and royalty rates ranging from 3.0% to 20.0% in estimating the fair value of our brands. If current expectations of future growth rates, royalty rates, and margins are not met, if market factors outside of our control change (such as discount rates, market capitalization, income tax rates, foreign currency exchange rates, or inflation), or if management’s expectations or plans otherwise change, including updates to our long-term operating plans, then one or more of our reporting units or brands might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets could lead to future goodwill or intangible asset impairments.
As detailed in Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, we recorded impairment losses related to goodwill and indefinite-lived intangible assets. Our reporting units and brands that were impaired in 2026 and 2025 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 had 20% or less excess fair value over carrying amount as of their latest impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.
Our reporting units that were determined to have less than 5% fair value over carrying amount as of our latest impairment test had an aggregate goodwill carrying amount of $18.2 billion and included TE, HDM, Europe, and AFH reporting units. Our MCCS reporting unit had over 5% but less than 10% fair value over carrying amount with an aggregate goodwill carrying amount of $1.2 billion as of the latest impairment test. Our reporting units that have 10% or less excess fair value over carrying amounts as of the latest impairment test are considered at a heightened risk of future impairments and had an aggregate carrying amount of $19.4 billion. Our China reporting unit had 20-50% fair value over carrying amount with a goodwill carrying amount of $258 million as of the latest impairment test. Our six remaining reporting units had no goodwill carrying amount at the time of the latest impairment test.
As of their latest impairment test, our brands that have 10% or less fair value over carrying amount, comprised entirely of brands that have zero fair value over carrying amounts, had a carrying amount of $9.3 billion and included Kraft, Miracle Whip, Oscar Mayer, Kool-Aid, Lunchables, Cool Whip, ABC, Claussen, Bagel Bites, and Wattie’s. Our brands that had over 10% but less than 20% fair value over carrying amount included Velveeta, A1, and Classico and had an aggregate carrying amount of $3.5 billion as of the latest impairment test. The aggregate carrying amount of brands with fair value over carrying amount 20% to 50% was $6.9 billion as of the latest impairment test. Although the remaining brands, with a carrying amount of $9.5 billion, have more than 50% excess fair value over carrying amount as of the latest impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future. Our brands that have 20% or less excess fair value over carrying amounts as of their latest impairment test are considered at a heightened risk of future impairments and had an aggregate carrying amount of $12.8 billion.
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We generally utilize the discounted cash flow method under the income approach to estimate the fair value of our reporting units. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual 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. We select 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 a consideration of market multiples of certain peer and guideline companies.
We utilize the excess earnings method under the income approach to estimate the fair value of certain of our largest brands. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual cash flows for each brand (including net sales, cost of products sold, and SG&A), contributory asset charges, income tax considerations, long-term growth rates, a discount rate that reflects the level of risk associated with the future earnings attributable to the brand, and management’s intent to invest in the brand indefinitely. We select 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 a consideration of market multiples of certain peer and guideline companies.
We utilize the relief from royalty method under the income approach to estimate the fair value of our remaining brands. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual sales for each brand, royalty rates (as a percentage of net sales that would hypothetically be charged by a licensor of the brand to an unrelated licensee), income tax considerations, long-term growth rates, a discount rate that reflects the level of risk associated with the future cost savings attributable to the brand, and management’s intent to invest in the brand indefinitely. We select 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 a consideration of market multiples of certain peer and guideline companies.
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 their latest impairment 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 | $ | 19.4 | 6.8 | % | 13.5 | % | — | % | 4.0 | % | |||||||||||||||||||||||||||||||
| Brands (excess earnings method) | 9.1 | 8.2 | % | 8.8 | % | — | % | 1.5 | % | ||||||||||||||||||||||||||||||||
| Brands (relief from royalty method) | 3.7 | 8.1 | % | 10.3 | % | — | % | 4.0 | % | 3.0 | % | 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. Additionally, these assumptions are generally interdependent and do not change in isolation. 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. 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.
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 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 | $ | (3.0) | $ | 3.5 | $ | 1.6 | $ | (1.5) | |||||||||||||||||||||||||||
| Brands (excess earnings method) | (0.6) | 0.7 | 0.3 | (0.2) | |||||||||||||||||||||||||||||||
| Brands (relief from royalty method) | (0.3) | 0.3 | 0.1 | (0.1) | $ | 0.4 | $ | (0.4) | |||||||||||||||||||||||||||
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Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited. We review definite-lived intangible assets for impairment when conditions exist that indicate the carrying amount of the assets may not be recoverable. Such conditions could include significant adverse changes in the business climate, current-period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of definite-lived intangible assets held for use, we group assets at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on definite-lived intangible assets to be disposed of, if any, are based on the estimated proceeds to be received less costs of disposal.
See Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, for our impairment testing results.
New Accounting Pronouncements
See Note 3, New Accounting Standards, in Item 1, Financial Statements, for a discussion of new accounting pronouncements.
Contingencies
See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, 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.
To supplement the condensed 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. 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. These measures are not substitutes for their comparable U.S. GAAP financial measures, such as net sales, net income/(loss), operating income/(loss), diluted EPS, or other measures prescribed by U.S. 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. 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.
Management believes that presenting our non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures.
Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. We calculate the impact of currency on net sales by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which we calculate the previous year’s results using the current year’s exchange rate.
Adjusted Operating Income is defined as operating income excluding, when they occur, the impacts of restructuring activities, deal costs, separation 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.
Adjusted EPS is defined as diluted EPS excluding, when they occur, the impacts of restructuring activities, deal costs, separation 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.
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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 | ||||||||||||||||||||||||||||||
Three Months Ended September 26, 2026 | |||||||||||||||||||||||||||||||||||
| North America | $ | 4,485 | $ | (8) | $ | — | $ | 4,493 | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | 910 | (2) | — | 912 | |||||||||||||||||||||||||||||||
| Emerging Markets | 720 | 16 | — | 704 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 6,115 | $ | 6 | $ | — | $ | 6,109 | |||||||||||||||||||||||||||
Three Months Ended September 27, 2025 | |||||||||||||||||||||||||||||||||||
| North America | $ | 4,641 | $ | — | $ | — | $ | 4,641 | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | 964 | — | 41 | 923 | |||||||||||||||||||||||||||||||
| Emerging Markets | 632 | 23 | — | 609 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 6,237 | $ | 23 | $ | 41 | $ | 6,173 | |||||||||||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||||||||
| North America | (3.4) | % | (0.2) pp | 0.0 pp | (3.2) | % | (0.8) pp | (2.4) pp | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | (5.6) | % | (0.1) pp | (4.2) pp | (1.3) | % | (0.4) pp | (0.9) pp | |||||||||||||||||||||||||||
| Emerging Markets | 13.8 | % | (1.8) pp | 0.0 pp | 15.6 | % | 7.2 pp | 8.4 pp | |||||||||||||||||||||||||||
| Kraft Heinz | (2.0) | % | (0.3) pp | (0.6) pp | (1.1) | % | 0.0 pp | (1.1) pp | |||||||||||||||||||||||||||
54
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 | ||||||||||||||||||||||||||||||
Nine Months Ended September 26, 2026 | |||||||||||||||||||||||||||||||||||
| North America | $ | 13,569 | $ | 12 | $ | — | $ | 13,557 | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | 2,757 | 90 | — | 2,667 | |||||||||||||||||||||||||||||||
| Emerging Markets | 2,098 | 87 | — | 2,011 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 18,424 | $ | 189 | $ | — | $ | 18,235 | |||||||||||||||||||||||||||
Nine Months Ended September 27, 2025 | |||||||||||||||||||||||||||||||||||
| North America | $ | 13,886 | $ | — | $ | — | $ | 13,886 | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | 2,813 | — | 123 | 2,690 | |||||||||||||||||||||||||||||||
Emerging Markets | 1,889 | 61 | — | 1,828 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 18,588 | $ | 61 | $ | 123 | $ | 18,404 | |||||||||||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||||||||
| North America | (2.3) | % | 0.1 pp | 0.0 pp | (2.4) | % | 0.2 pp | (2.6) pp | |||||||||||||||||||||||||||
| Europe and Pacific Developed Markets | (2.0) | % | 3.2 pp | (4.3) pp | (0.9) | % | 0.0 pp | (0.9) pp | |||||||||||||||||||||||||||
Emerging Markets | 11.1 | % | 1.1 pp | 0.0 pp | 10.0 | % | 5.8 pp | 4.2 pp | |||||||||||||||||||||||||||
| Kraft Heinz | (0.9) | % | 0.7 pp | (0.7) pp | (0.9) | % | 0.8 pp | (1.7) pp | |||||||||||||||||||||||||||
55
The Kraft Heinz Company
Reconciliation of Operating Income/(Loss) to Adjusted Operating Income
(dollars in millions)
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Operating income/(loss) | $ | 875 | $ | 1,025 | $ | (4,411) | $ | (5,753) | |||||||||||||||
| Restructuring activities | 7 | 6 | 38 | 10 | |||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (39) | 23 | (116) | 6 | |||||||||||||||||||
| Impairment losses | 72 | 35 | 7,437 | 9,301 | |||||||||||||||||||
| Separation costs | 24 | 17 | 90 | 17 | |||||||||||||||||||
| Adjusted Operating Income | $ | 939 | $ | 1,106 | $ | 3,038 | $ | 3,581 | |||||||||||||||
56
The Kraft Heinz Company
Reconciliation of Diluted EPS to Adjusted EPS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 | ||||||||||||||||||||
| Diluted EPS | $ | 0.46 | $ | 0.52 | $ | (3.47) | $ | (5.47) | |||||||||||||||
Restructuring activities(a) | 0.01 | — | — | 0.01 | |||||||||||||||||||
Unrealized losses/(gains) on commodity hedges(b) | (0.02) | 0.02 | (0.07) | — | |||||||||||||||||||
Impairment losses(c) | 0.06 | 0.03 | 5.30 | 7.30 | |||||||||||||||||||
Separation costs(d) | 0.01 | 0.01 | 0.05 | 0.01 | |||||||||||||||||||
Losses/(gains) on sale of business(e) | — | 0.04 | (0.02) | 0.04 | |||||||||||||||||||
Nonmonetary currency devaluation(f) | 0.01 | — | 0.02 | 0.02 | |||||||||||||||||||
Debt prepayment and extinguishment (benefit)/costs(g) | — | — | (0.14) | — | |||||||||||||||||||
Certain significant discrete income tax items(h) | — | (0.01) | — | 0.01 | |||||||||||||||||||
| Adjusted EPS | $ | 0.53 | $ | 0.61 | $ | 1.67 | $ | 1.92 | |||||||||||||||
(a) Gross expenses/(income) included in restructuring activities were expenses of $7 million ($6 million after-tax) for the three months and income of $7 million ($5 million after-tax) for the nine months ended September 26, 2026 and expenses of $4 million ($1 million after-tax) for the three months and $18 million ($9 million after-tax) for the nine months ended September 27, 2025 and were recorded in the following income statement line items:
•Cost of products sold included expenses of $1 million for the three months and $31 million for the nine months ended September 26, 2026 and expenses of $2 million for the three months and $1 million for the nine months ended September 27, 2025;
•SG&A included expenses of $6 million for the three months and $7 million for the nine months ended September 26, 2026 and expenses of $4 million for the three month and $9 million for the nine months ended September 27, 2025; and
•Other expense/(income) included income of $45 million for the nine months ended September 26, 2026 and income of $2 million for the three months and expenses of $8 million for the nine months ended September 27, 2025.
(b) Gross expenses/(income) included in unrealized losses/(gains) on commodity hedges were income of $39 million ($29 million after-tax) for the three months and $116 million ($87 million after-tax) for the nine months ended September 26, 2026 and expenses of $23 million ($18 million after-tax) for the three months ended and $6 million ($5 million after-tax) for the nine months ended September 27, 2025, which were recorded in cost of products sold.
(c) Gross impairment losses included the following:
•Goodwill impairment losses of $69 million ($69 million after-tax) for the three months and $2.5 billion ($2.5 billion after-tax) for the nine months ended September 26, 2026 and $35 million ($35 million after-tax) for the three months and $6.7 billion ($6.7 billion after-tax) for the nine months ended September 27, 2025, which were recorded in SG&A;
•Intangible asset impairment losses of $3 million ($3 million after-tax) for the three months and $4.9 billion ($3.8 billion after-tax) for the nine months ended September 26, 2026 and $2.6 billion ($2 billion after-tax) for the nine months ended September 27, 2025, which were recorded in SG&A.
(d) Gross expenses included in separation costs were $24 million ($17 million after-tax) for the three months and $90 million ($68 million after-tax) for the nine months ended September 26, 2026 and $17 million ($13 million after-tax) for the three and nine months ended September 27, 2025, which were recorded in SG&A.
(e) Gross expenses/(income) included in losses/(gains) on sale of business were expenses of $2 million ($2 million after-tax) for the three months and income of $1 million ($27 million after-tax) for the nine months ended September 26, 2026 and expenses of $44 million ($44 million after-tax) for the three and nine months ended September 27, 2025, which were recorded in other expense/(income).
(f) Gross expenses included in nonmonetary currency devaluation were $18 million ($18 million after-tax) for the three months and $34 million ($34 million after-tax) for the nine months ended September 26, 2026 and $5 million ($5 million after-tax) for the three months and $26 million ($26 million after-tax) for the nine months ended September 27, 2025, which were recorded in other expense/(income).
(g) Gross expenses/(income) included in debt prepayment and extinguishment costs were expenses of $2 million ($1 million after-tax) for the three months and income of $226 million ($170 million after-tax) for the nine months ended September 26, 2026, and were recorded in interest expense/(income) and other expense/(income). This income includes a gain from extinguishment of debt of $264 million which was partially offset by a loss from an interest rate hedge of $38 million.
(h) Certain significant discrete income tax items were a benefit of $6 million for the three months and expenses of $10 million for the nine months ended September 27, 2025. The expense represents movement in the valuation allowance against deferred tax assets in our subsidiary in Brazil and adjustments recorded to the deferred tax asset and valuation allowance related to the transfer of business operations to a wholly-owned subsidiary in the Netherlands in December 2024.
57
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes to our market risk during the nine months ended September 26, 2026. For additional information, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in our Annual Report on Form 10-K for the year ended December 27, 2025.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 26, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of September 26, 2026, were effective and provided reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended September 26, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In 2024, we initiated a multi-year project to migrate certain of our financial processing systems. The project included the migration to a new enterprise resource planning (ERP) solution that we expected to implement in phases throughout our businesses over a several year period. During 2025, we completed the implementation of our new ERP solution in certain countries in the Emerging Markets segment as part of the first phase of our ERP transition, which did not result in significant changes in our internal control over financial reporting. We have continued our ERP migration project during 2026 and completed an additional implementation within the Emerging Markets segment. We will continue to evaluate the design and operating effectiveness of internal controls as they relate to any system upgrades, and we will implement the required control changes prior to relevant go-live dates associated with the system implementations.
58
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements.
Item 1A. Risk Factors.
There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 27, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Our share repurchase activity in the three months ended September 26, 2026 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) | |||||||||||||||||||||||
| 6/28/2026 — 8/1/2026 | 4,733 | $ | 23.77 | — | $ | 1,502 | ||||||||||||||||||||
| 8/2/2026 — 8/29/2026 | 12,144 | 25.40 | — | 1,502 | ||||||||||||||||||||||
| 8/30/2026 — 9/26/2026 | 2,035,863 | 25.60 | — | 1,502 | ||||||||||||||||||||||
| Total | 2,052,740 | — | ||||||||||||||||||||||||
(a) Includes (1) shares repurchased to offset the dilutive effect of the vesting RSUs and PSUs and (2) shares withheld for tax liabilities associated with the vesting of RSUs.
(b) On November 27, 2023, the Company announced that the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $3.0 billion of the Company’s common stock through December 26, 2026. The Company is not obligated to repurchase any specific number of shares and the program may be modified, suspended, or discontinued at any time. 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 5. Other Information.
(c) Insider Stock Trading Arrangements:
None.
59
| Exhibit No. | Descriptions | |||||||
| 3.2 | ||||||||
| 22.1 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.1 | The following materials from The Kraft Heinz Company’s Quarterly Report on Form 10-Q for the period ended September 26, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements, and (vii) document and entity information.* | |||||||
| 104.1 | The cover page from The Kraft Heinz Company’s Quarterly Report on Form 10-Q for the three months ended September 26, 2026, formatted in iXBRL.* | |||||||
| + | Indicates a management contract or compensatory plan or arrangement. | |||||||
| * | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
60
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| The Kraft Heinz Company | |||||||||||
Date: | November 4, 2026 | ||||||||||
| By: | /s/ Andre Maciel | ||||||||||
| Andre Maciel | |||||||||||
| Executive Vice President and Global Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) | |||||||||||
| The Kraft Heinz Company | |||||||||||
Date: | November 4, 2026 | ||||||||||
| By: | /s/ Chris Asher | ||||||||||
| Chris Asher | |||||||||||
| Vice President and Global Controller | |||||||||||
(Principal Accounting Officer) | |||||||||||
61