Item 8. Financial Statements and Supplementary Data.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of The Kraft Heinz Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Kraft Heinz Company and its subsidiaries (the "Company") as of December 27, 2025 and December 28, 2024, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 27, 2025, including the related notes and financial statement schedule listed in the index appearing under Item 15(a) (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 27, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Interim (Q2) and Annual Goodwill Impairment Assessments for Certain Reporting Units

As described in Notes 2 and 9 to the consolidated financial statements, the Company’s goodwill balance was $22.2 billion as of December 27, 2025, a significant portion of which related to certain reporting units, Elevation; Hydration, Desserts, & Meals (HDM); Western Europe (WE); and Meat, Cheese, Coffee, & Snacks (MCCS). Management tests reporting units for impairment annually as of the first day of the third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Reporting units are tested for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount, not to exceed the associated carrying amount of goodwill. As a result of the interim impairment test performed in the second quarter of 2025, management recognized non-cash goodwill impairment losses of $6.7 billion all of which related to the Taste Elevation, Ready Meals, and Snacking (TMS); Meat & Cheese (MC); Western Europe (WE); Canada and North America Coffee (CNAC); and Away from Home & Kraft Heinz Ingredients (AFH) reporting units. Management utilizes the discounted cash flow method under the income approach to estimate the fair value of reporting units. Management’s cash flow projections included significant assumptions related to net sales, cost of products sold, selling, general, and administrative costs (SG&A), depreciation and amortization, working capital, capital expenditures, income tax rates, discount rates, long-term growth rates, royalty rates, and other market factors.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments in the second quarter of 2025 (for TMS, AFH, WE, MC, and CNAC) and the annual goodwill impairment assessments (for Elevation, HDM, WE, and MCCS) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to net sales, cost of products sold, SG&A, income tax rate, discount rate, long-term growth rate, and royalty rate, as applicable to the reporting unit; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the TMS, AFH, WE, MC, and CNAC reporting units on an interim basis and Elevation, HDM, WE, and MCCS on an annual basis. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the discounted cash flow method used by management; (iii) testing the completeness and accuracy of underlying data used in the method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to net sales, cost of products sold, SG&A, income tax rate, discount rate, long-term growth rate, and royalty rate, as applicable to the reporting unit. Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, income tax rates, royalty rates, discount rates, and long-term growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow method and (ii) the reasonableness of the discount rate and long-term growth rate assumptions, as applicable to the reporting unit.

Interim (Q2) and Annual Impairment Assessments for Certain Indefinite-Lived Intangible Assets– Individual Brands

As described in Notes 2 and 9 to the consolidated financial statements, the Company’s indefinite-lived intangible assets balance, which consists primarily of individual brands, was $34.2 billion as of December 27, 2025, a portion of which related to certain brands, Kraft, Velveeta, Oscar Mayer, Lunchables, and Capri Sun. Management tests brands for impairment annually as of the first day of the third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a brand is less than its carrying amount. Brands are tested for impairment by comparing the estimated fair value of each brand with its carrying amount. If the carrying amount of a brand exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount. As a result of the interim impairment test performed in the second quarter of 2025, management recognized non-cash indefinite-lived intangible asset impairment losses

of $2.6 billion, a significant portion of which related to the Kraft, Velveeta and Lunchables brands. As disclosed by management, management utilizes either an excess earnings method or relief from royalty method to estimate the fair value of its brands. Using the excess earnings method, management’s cash flow projections included significant assumptions relating to net sales, cost of products sold, SG&A, contributory asset charges, income tax considerations, long-term growth rates, discount rates, and other market factors. Using the relief from royalty method, management’s cash flow projections included significant assumptions related to net sales, royalty rates, income tax considerations, long-term growth rates, discount rates, and other market factors.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments in the second quarter of 2025 (for Kraft, Velveeta, Oscar Mayer, and Lunchables) and the annual indefinite-lived intangible impairment assessments (for Kraft, Velveeta, Oscar Mayer, Lunchables, and Capri Sun) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the brands; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) net sales, cost of products sold, SG&A, discount rates, and long-term growth rates, as applicable to the brand, for the excess earnings method and (b) net sales, discount rates, and royalty rates, as applicable to the brand, for the relief from royalty method; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible assets impairment assessments, including controls over the valuation of the Kraft, Velveeta, Oscar Mayer, and Lunchables brands on an interim basis and Kraft, Velveeta, Oscar Mayer, Lunchables and Capri Sun brands on an annual basis. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the brands; (ii) evaluating the appropriateness of the excess earnings and relief from royalty methods used by management; (iii) testing the completeness and accuracy of underlying data used in the methods; and (iv) evaluating the reasonableness of the significant assumptions used by management related to (a) net sales, cost of products sold, SG&A, discount rates, and long-term growth rates, as applicable to the brand, used for the excess earnings method and (b) net sales, discount rates, and royalty rates, as applicable to the brand, used for the relief from royalty method. Evaluating management’s assumptions related to net sales, cost of products sold, SG&A, discount rates, and long-term growth rates for the excess earnings method and net sales, discount rates, and royalty rates for the relief from royalty method involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s excess earnings and relief from royalty methods and (ii) the reasonableness of the discount rate and long-term growth rate assumptions for the excess earnings method and the reasonableness of the discount rate and royalty rate assumptions for the relief from royalty method.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

February 12, 2026

We have served as the Company’s or its predecessors' auditor since 1979.

The Kraft Heinz Company

Consolidated Statements of Income

(in millions, except per share data)

			December 27, 2025						December 28, 2024						December 30, 2023
Net sales			$	24,942					$	25,846					$	26,640
Cost of products sold			16,633						16,878						17,714
Gross profit			8,309						8,968						8,926
Selling, general and administrative expenses, excluding impairment losses			3,672						3,616						3,692
Goodwill impairment losses			6,734						1,638						510
Intangible asset impairment losses			2,572						2,031						152
Selling, general and administrative expenses			12,978						7,285						4,354
Operating income/(loss)			(4,669)						1,683						4,572
Interest expense			947						912						912
Other expense/(income)			(171)						(85)						27
Income/(loss) before income taxes			(5,445)						856						3,633
Provision for/(benefit from) income taxes			403						(1,890)						787
Net income/(loss)			(5,848)						2,746						2,846
Net income/(loss) attributable to noncontrolling interest			(2)						2						(9)
Net income/(loss) attributable to common shareholders			$	(5,846)					$	2,744					$	2,855
Per share data applicable to common shareholders:
Basic earnings/(loss)			$	(4.93)					$	2.27					$	2.33
Diluted earnings/(loss)			(4.93)						2.26						2.31

See accompanying notes to the consolidated financial statements.

The Kraft Heinz Company

Consolidated Statements of Comprehensive Income

(in millions)

			December 27, 2025						December 28, 2024						December 30, 2023
Net income/(loss)			$	(5,848)					$	2,746					$	2,846
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustments			987						(513)						309
Net deferred gains/(losses) on net investment hedges			(313)						121						(119)
Amounts excluded from the effectiveness assessment of net investment hedges			28						38						28
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)			(30)						(38)						(27)
Net deferred gains/(losses) on cash flow hedges			106						21						3
Amounts excluded from the effectiveness assessment of cash flow hedges			(1)						6						19
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)			(173)						39						(50)
Amounts excluded from the effectiveness assessment of fair value hedges			26						(23)						—
Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss)			(6)						(3)						—
Net actuarial gains/(losses) arising during the period			(81)						35						(70)
Prior service credits/(costs) arising during the period			(3)						(7)						—
Net postemployment benefit losses/(gains) reclassified to net income/(loss)			(6)						(14)						115
Total other comprehensive income/(loss)			534						(338)						208
Total comprehensive income/(loss)			(5,314)						2,408						3,054
Comprehensive income/(loss) attributable to noncontrolling interest			(13)						(25)						(7)
Comprehensive income/(loss) attributable to common shareholders			$	(5,301)					$	2,433					$	3,061

See accompanying notes to the consolidated financial statements.

The Kraft Heinz Company

Consolidated Balance Sheets

(in millions, except per share data)

			December 27, 2025						December 28, 2024
ASSETS
Cash and cash equivalents			$	2,615					$	1,334
Trade receivables (net of allowances of $34 at December 27, 2025 and $26 at December 28, 2024)			2,254						2,147
Inventories			3,167						3,376
Prepaid expenses			291						215
Marketable securities			1,060						—
Other current assets			588						583
Assets held for sale			152						—
Total current assets			10,127						7,655
Property, plant and equipment, net			7,318						7,152
Goodwill			22,179						28,673
Intangible assets, net			37,529						40,099
Other non-current assets			4,633						4,708
TOTAL ASSETS			$	81,786					$	88,287
LIABILITIES AND EQUITY
Current portion of long-term debt			$	1,908					$	654
Accounts payable			4,308						4,188
Accrued marketing			801						697
Interest payable			298						263
Other current liabilities			1,455						1,451
Liabilities held for sale			8						—
Total current liabilities			8,778						7,253
Long-term debt			19,311						19,215
Deferred income taxes			9,022						9,679
Accrued postemployment costs			131						135
Long-term deferred income			1,321						1,374
Other non-current liabilities			1,434						1,306
TOTAL LIABILITIES			39,997						38,962
Commitments and Contingencies (Note 16)
Redeemable noncontrolling interest			12						6
Equity:
Common stock, $0.01 par value (5,000 shares authorized; 1,257 shares issued and 1,184 shares outstanding at December 27, 2025; 1,254 shares issued and 1,195 shares outstanding at December 28, 2024)			12						12
Additional paid-in capital			51,287						52,135
Retained earnings/(deficit)			(4,629)						2,171
Accumulated other comprehensive income/(losses)			(2,370)						(2,915)
Treasury stock, at cost (73 shares at December 27, 2025 and 59 shares at December 28, 2024)			(2,636)						(2,218)
Total shareholders' equity			41,664						49,185
Noncontrolling interest			113						134
TOTAL EQUITY			41,777						49,319
TOTAL LIABILITIES AND EQUITY			$	81,786					$	88,287

See accompanying notes to the consolidated financial statements.

The Kraft Heinz Company

Consolidated Statements of Equity

(in millions)

			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 31, 2022			$	12					$	51,834					$	489					$	(2,810)					$	(847)					$	152					$	48,830
Net income/(loss) excluding redeemable noncontrolling interest			—						—						2,855						—						—						1						2,856
Other comprehensive income/(loss) excluding redeemable noncontrolling interest			—						—						—						206						—						—						206
Dividends declared-common stock ($1.60 per share)			—						—						(1,977)						—						—						—						(1,977)
Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other			—						203						—						—						(439)						9						(227)
Balance at December 30, 2023			12						52,037						1,367						(2,604)						(1,286)						162						49,688
Net income/(loss) excluding redeemable noncontrolling interest			—						—						2,744						—						—						2						2,746
Other comprehensive income/(loss) excluding redeemable noncontrolling interest			—						—						—						(311)						—						(20)						(331)
Dividends declared-common stock ($1.60 per share)			—						—						(1,940)						—						—						—						(1,940)
Dividends declared-noncontrolling interest ($98.77 per share on January 31, 2024 and $95.03 per share on December 11, 2024)			—						—						—						—						—						(14)						(14)
Repurchase of common stock			—						—						—						—						(939)						—						(939)
Exercise of stock options, issuance of other stock awards, and other			—						98						—						—						7						4						109
Balance at December 28, 2024			12						52,135						2,171						(2,915)						(2,218)						134						49,319
Net income/(loss) excluding redeemable noncontrolling interest			—						—						(5,846)						—						—						(2)						(5,848)
Other comprehensive income/(loss) excluding redeemable noncontrolling interest			—						—						—						545						—						(17)						528
Dividends declared-common stock ($1.60 per share)			—						(952)						(954)						—						—						—						(1,906)
Dividends declared-noncontrolling interest ($92.08 per share)			—						—						—						—						—						(6)						(6)
Repurchase of common stock			—						—						—						—						(402)						—						(402)
Exercise of stock options, issuance of other stock awards, and other			—						104						—						—						(16)						4						92
Balance at December 27, 2025			$	12					$	51,287					$	(4,629)					$	(2,370)					$	(2,636)					$	113					$	41,777

See accompanying notes to the consolidated financial statements.

The Kraft Heinz Company

Consolidated Statements of Cash Flows

(in millions)

			December 27, 2025						December 28, 2024						December 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)			$	(5,848)					$	2,746					$	2,846
Adjustments to reconcile net income/(loss) to operating cash flows:
Depreciation and amortization			968						948						961
Divestiture-related license income			(52)						(54)						(54)
Equity award compensation expense			95						109						141
Deferred income tax provision/(benefit)			(495)						(2,857)						17
Postemployment benefit plan asset transfers/(contributions)			185						161						(22)
Goodwill and intangible asset impairment losses			9,306						3,669						662
Nonmonetary currency devaluation			34						16						28
Loss/(gain) on sale of business			42						81						(4)
Other items, net			(3)						(46)						207
Changes in current assets and liabilities:
Trade receivables			(55)						(139)						18
Inventories			133						(6)						(106)
Accounts payable			(97)						(308)						(295)
Other current assets			(88)						(38)						139
Other current liabilities			337						(98)						(562)
Net cash provided by/(used for) operating activities			4,462						4,184						3,976
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(801)						(1,024)						(1,013)
Payments to acquire intangible assets			—						(140)						—
Purchases of marketable securities			(1,724)						—						—
Proceeds from sale of marketable securities			686						—						—
Proceeds from sale of business, net of cash disposed and working capital adjustments			9						8						—
Other investing activities, net			(3)						133						97
Net cash provided by/(used for) investing activities			(1,833)						(1,023)						(916)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt			(678)						(618)						(848)
Proceeds from issuance of long-term debt			1,620						594						657
Proceeds from issuance of commercial paper			—						—						150
Repayments of commercial paper			—						—						(150)
Dividends paid			(1,898)						(1,931)						(1,965)
Repurchases of common stock			(436)						(988)						(455)
Other financing activities, net			141						(65)						(67)
Net cash provided by/(used for) financing activities			(1,251)						(3,008)						(2,678)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			80						(71)						(19)
Cash, cash equivalents, and restricted cash
Net increase/(decrease)			1,458						82						363
Balance at beginning of period			1,486						1,404						1,041
Balance at end of period			$	2,944					$	1,486					$	1,404
CASH PAID DURING THE PERIOD FOR:
Interest			$	903					$	906					$	896

See accompanying notes to the consolidated financial statements.

The Kraft Heinz Company

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation

Organization

On July 2, 2015 (the “2015 Merger Date”), through a series of transactions, we consummated the merger of Kraft Foods Group, Inc. (“Kraft”) with and into a wholly-owned subsidiary of H.J. Heinz Holding Corporation (“Heinz”) (the “2015 Merger”). At the closing of the 2015 Merger, Heinz was renamed The Kraft Heinz Company.

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 2025 fiscal year was a 52-week period that ended on December 27, 2025, our 2024 fiscal year was a 52-week period that ended on December 28, 2024, and our 2023 fiscal year was a 52-week period that ended on December 30, 2023.

Principles of Consolidation

The consolidated financial statements include The Kraft Heinz Company and all of our controlled subsidiaries. All intercompany transactions are eliminated.

Reportable Segments

We manage our operating results through four operating segments: North America, Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”). We have two reportable segments defined by geographic region: North America and International Developed Markets. Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

Use of Estimates

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

Reclassifications

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

Held for Sale

At December 27, 2025, we classified certain assets and liabilities as held for sale in our consolidated balance sheet, primarily relating to the divestiture of our infant and specialty food business in Italy in our International Developed Markets segment. At December 28, 2024, assets classified as held for sale were insignificant. See Note 5, 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 three months 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 consolidated balance sheets. 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. At December 28, 2024, we had restricted cash of $31 million recorded in other current assets and restricted cash of $121 million recorded in other non-current assets. The year-over-year increase was due to the conversion of certain assets related to the U.S. postretirement medical plan to cash, partially offset by claim payments for active and retired employees as a result of the conversion. See Note 12, Postemployment Benefits, for additional information. Total cash, cash equivalents, and restricted cash was $2,944 million at December 27, 2025 and $1,486 million at December 28, 2024.

Note 2. Significant Accounting Policies

Revenue Recognition:

Our revenues are primarily derived from customer orders for the purchase of our products. We recognize revenues as performance obligations are fulfilled when control passes to our customers. We record revenues net of variable consideration, including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). We also record a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. We base these estimates principally on historical and current period experience factors. We recognize costs paid to third-party brokers to obtain contracts as expenses as our contracts are generally less than one year.

Advertising, Consumer Incentives, and Trade Promotions:

We promote our products with advertising, consumer incentives, and performance obligations related to trade promotions. Consumer incentives and trade promotions include, but are not limited to, discounts, coupons, rebates, performance-based in-store display activities, and volume-based incentives. Variable consideration related to consumer incentive and trade promotion activities is recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization, redemption rates, and/or current period experience factors. We review and adjust these estimates at least quarterly based on actual experience and other information.

Advertising expenses are recorded in selling, general and administrative expenses (“SG&A”). For interim reporting purposes, we charge advertising to operations as a percentage of estimated full year sales activity and marketing costs. We then review and adjust these estimates each quarter based on actual experience and other information. Our definition of advertising expenses includes advertising production costs, in-store advertising costs, agency fees, brand promotions and events, and sponsorships, in addition to costs to obtain advertising in television, radio, print, digital, and social channels. We recorded advertising expenses of $1,073 million in 2025, $1,031 million in 2024, and $1,071 million in 2023. We also incur market research costs, which are recorded in SG&A but are excluded from advertising expenses.

Research and Development Expense:

We expense costs as incurred for product research and development within SG&A. Research and development expenses were approximately $167 million in 2025, $150 million in 2024, and $147 million in 2023.

Stock-Based Compensation:

We recognize compensation costs related to equity awards on a straight-line basis over the vesting period of the award, which is generally three to four years, or on a straight-line basis over the requisite service period for each separately vesting portion of the awards. These costs are primarily recognized within SG&A. We estimate expected forfeitures rather than recognizing forfeitures as they occur in determining our equity award compensation costs. We classify equity award compensation costs primarily within general corporate expenses. See Note 11, Employees’ Stock Incentive Plans, for additional information.

Divestiture-Related License Income:

In 2021, we finalized a transaction with a third party, an affiliate of Groupe Lactalis (“Lactalis”) to sell certain assets in our global cheese business, as well as to license the Kraft, Velveeta and Philadelphia trademarks, for a total consideration of approximately $3.3 billion. Of the $3.3 billion total consideration, approximately $1.6 billion was attributed to the licensing of the Kraft, Velveeta and Philadelphia trademarks based on the estimated fair value of the licensed portion of each brand. The license income related to the perpetual licenses of the Kraft and Velveeta brands are recognized over a period of approximately 30 years. The license income related to the transitional license of the Philadelphia brand was recognized over a period of approximately three years. We recognized license income of approximately $52 million in 2025, and $54 million in 2024 and 2023, which is recorded as a reduction to SG&A. Related to this agreement, we have recorded approximately $1.3 billion in long-term deferred income and $54 million in other current liabilities at December 27, 2025, and $1.4 billion in long-term deferred income and $54 million in other current liabilities at December 28, 2024 on the consolidated balance sheets.

Postemployment Benefit Plans:

We maintain various retirement plans for the majority of our employees. These include pension benefits, postretirement health care benefits, and defined contribution benefits. The cost of these plans is charged to expense over an appropriate term based on, among other things, the cost component and whether the plan is active or inactive. Changes in the fair value of our plan assets result in net actuarial gains or losses. These net actuarial gains and losses are deferred into accumulated other comprehensive income/(losses) and amortized within other expense/(income) in future periods using the corridor approach. The corridor is 10% of the greater of the market-related value of the plan’s asset or projected benefit obligation. Any actuarial gains and losses in excess of the corridor are then amortized over an appropriate term based on whether the plan is active or inactive. See Note 12, Postemployment Benefits, for additional information.

Income Taxes:

We recognize income taxes based on amounts refundable or payable for the current year and record deferred tax assets or liabilities for any difference between the financial reporting and tax basis of our assets and liabilities. We also recognize deferred tax assets for temporary differences, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets are included in other non-current assets on the consolidated balance sheets. Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes. Realization of certain deferred tax assets, primarily net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.

We apply a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. Accordingly, we recognize the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. Future changes in judgment related to the expected ultimate resolution of uncertain tax positions will affect our results in the period of such change.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for valuation allowances, we consider future taxable income, future legislative developments, and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for/(benefit from) income taxes. The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period, but is not expected to be material to our financial position.

Common Stock and Preferred Stock Dividends:

Dividends are recorded as a reduction to retained earnings. When we have an accumulated retained deficit, dividends are recorded as a reduction of additional paid-in capital.

Inventories:

Inventories are stated at the lower of cost or net realizable value. We value inventories primarily using the average cost method.

Property, Plant and Equipment:

Property, plant and equipment are stated at historical cost and depreciated on the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from three years to 20 years and buildings and improvements over periods up to 40 years. Capitalized software costs are included in property, plant and equipment if we have the contractual right to take possession of the software at any time and it is feasible for us to either run the software on our own hardware or contract with a third party to host the software. These costs are amortized on a straight-line basis over the estimated useful lives of the software, which do not exceed 10 years. We review long-lived assets for impairment when conditions exist that indicate the carrying amount of the assets may not be fully 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 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 assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

Hosted Cloud Computing Arrangement that is a Service Contract:

Deferred implementation costs for hosted cloud computing service arrangements are stated at historical cost and amortized on a straight-line basis over the term of the hosting arrangement that the implementation costs relate to. Deferred implementation costs to be amortized during the next 12 months for these arrangements are included in prepaid expenses and amortized to SG&A. All remaining amounts to be amortized are included in other non-current assets. The corresponding cash flows related to these arrangements will be reported within operating activities. We review the deferred implementation costs for impairment when we believe the deferred costs may no longer be recoverable. Such conditions could include situations where the arrangement is not expected to provide substantive service potential, a significant change occurs in the manner in which the arrangement is used or expected to be used, including early cancellation or termination of the arrangement, or situations where the arrangement has had, or will have, a significant change made to it. In instances where we have concluded that an impairment exists, we accelerate the deferred costs on the consolidated balance sheets for immediate expense recognition in SG&A.

Goodwill and Intangible Assets**:**

We maintain 10 reporting units globally, six of which comprise our goodwill balance. Our indefinite-lived intangible asset balance primarily consists of a number of individual brands. 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.

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 9, Goodwill and Intangible Assets, for additional information.

Leases:

We determine whether a contract is or contains a lease at contract inception based on the presence of identified assets and our right to obtain substantially all the economic benefit from and to direct the use of such assets. When we determine a lease exists, we record a right-of-use (“ROU”) asset and corresponding lease liability on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized at the lease commencement date at the value of the lease liability and are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. Lease liabilities are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term. As the discount rate implicit in the lease is not readily determinable in most of our leases, we use our incremental borrowing rate (dependent on tenor and currency and adjusted to reflect collateralization) based on the information available at the lease commencement date in determining the present value of lease payments. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets.

We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense over the shorter of the estimated useful life of the underlying assets or the lease term. In instances of title transfer, expense is recognized over the useful life. Interest expense on a finance lease is recognized using the effective interest method over the lease term.

We have lease agreements with non-lease components that relate to the lease components (e.g., common area maintenance such as cleaning or landscaping, insurance, etc.). We generally account for each lease and any non-lease components associated with that lease as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease costs.

Certain leasing arrangements require variable payments that are dependent on usage or output or may vary for other reasons, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the ROU asset and lease liability and are recognized as expenses in the period in which the payment occurs.

Our lease agreements typically do not include significant restrictions or covenants, and residual value guarantees are generally not included within our leases.

See Note 18, Leases, for additional information.

Financial Instruments:

Derivatives and hedging instruments:

As we source our commodities on global markets and periodically enter into financing or other arrangements abroad, we use a variety of risk management strategies and financial instruments to manage commodity price, foreign currency exchange rate, and interest rate risks. Our risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on our operating results. One way we do this is through actively hedging our risks through the use of derivative instruments. As a matter of policy, we do not use highly leveraged derivative instruments, nor do we use financial instruments for speculative purposes.

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

Certain derivatives are designated as cash flow hedges or fair value hedges and qualify for hedge accounting treatment, while others are not designated as hedging instruments and are marked to market through net income/(loss). The gains and losses on cash flow hedges are deferred as a component of accumulated other comprehensive income/(losses) and are recognized in net income/(loss) at the time the hedged item affects net income/(loss), in the same line item as the underlying hedged item. The gains/(losses) on fair value hedges are recognized in net income/(loss) at the time the hedged item affects net income/(loss), in the same line item as the underlying hedged item. The excluded component on cash flow hedges and fair value hedges is recognized in net income/(loss) over the life of the hedging relationship in the same income statement line item as the underlying hedged item. We also designate certain derivatives and non-derivatives as net investment hedges to hedge the net assets of certain foreign subsidiaries which are exposed to volatility in foreign currency exchange rates. Changes in the value of these derivatives and remeasurements of our non-derivatives designated as net investment hedges are calculated each period using the spot method, with changes reported in foreign currency translation adjustments within accumulated other comprehensive income/(losses). Such amounts will remain in accumulated other comprehensive income/(losses) until the complete or substantially complete liquidation of our investment in the underlying foreign operations. The excluded component on derivatives designated as net investment hedges is recognized in net income/(loss) within interest expense. The income

statement classification of gains and losses related to derivative instruments not designated as hedging instruments is determined based on the underlying intent of the contracts. Cash flows related to the settlement of derivative instruments designated as net investment hedges of foreign operations are classified in the consolidated statements of cash flows within investing activities. All other cash flows related to derivative instruments are classified in the same caption as the cash flows of the related hedged item, which can be within operating, investing, or financing activities.

To qualify for hedge accounting, a specified level of hedging effectiveness between the hedging instrument and the item being hedged must be achieved at inception and maintained throughout the hedged period. When a hedging instrument no longer meets the specified level of hedging effectiveness, we reclassify the related hedge gains or losses previously deferred into other comprehensive income/(losses) to net income/(loss) within other expense/(income). We formally document our risk management objectives, our strategies for undertaking the various hedge transactions, the nature of and relationships between the hedging instruments and hedged items, and the method for assessing hedge effectiveness. Additionally, for qualified hedges of forecasted transactions, we specifically identify the significant characteristics and expected terms of the forecasted transactions. If it becomes probable that a forecasted transaction will not occur, the hedge will no longer be effective and all of the derivative gains or losses would be recognized in net income/(loss) in the current period.

Unrealized gains and losses on our commodity derivatives not designated as hedging instruments are recorded in cost of products sold and are included within general corporate expenses until realized. Once realized, the gains and losses are included within the applicable segment operating results.

Our designated and undesignated derivative contracts include:

*•*Net investment hedges. We have numerous investments in our foreign subsidiaries, the net assets of which are exposed to volatility in foreign currency exchange rates. We manage this risk by utilizing derivative and non-derivative instruments, including cross-currency swap contracts, foreign exchange contracts, and certain foreign currency denominated debt designated as net investment hedges. We exclude the interest accruals and any off-market values on cross-currency swap contracts and the forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals and any amortization of off-market values on cross-currency swap contracts in net income/(loss) within interest expense. We amortize the forward points on foreign exchange contracts into net income/(loss) within interest expense over the life of the hedging relationship.

*•*Foreign currency cash flow hedges. We use various financial instruments to mitigate our exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions. Our principal foreign currency exposures that are hedged include the euro, Canadian dollar, and British pound sterling. These instruments include cross-currency swap contracts and foreign exchange forward and option contracts. Substantially all of these derivative instruments are highly effective and qualify for hedge accounting treatment. We exclude the interest accruals on cross-currency swap contracts (when interest is not a hedged item) and the forward points and option premiums or discounts on foreign exchange contracts from the assessment and measurement of hedge effectiveness and amortize such amounts into net income/(loss) in the same line item as the underlying hedged item over the life of the hedging relationship.

• Interest rate cash flow hedges. From time to time, we have used derivative instruments, including interest rate swaps and treasury locks, as part of our interest rate risk management strategy. We have primarily used interest rate swaps and treasury locks to hedge the variability of interest payment cash flows on a portion of our future debt obligations.

• Foreign currency fair value hedges. We use derivative instruments to hedge changes in the fair value of foreign currency denominated assets or liabilities due to changes in exchange rates. These instruments may include cross-currency swap contracts and foreign exchange forward contracts. The gains/(losses) on the hedged item, driven by changes in foreign exchange rates, are economically offset by fair value movements on the effective portion of our derivative instrument, which is reported in the same income statement line item in the same period. The amounts excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis in the same line item as the hedged item.

*•*Commodity derivatives. We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. We enter into commodity purchase contracts primarily for dairy products, vegetable oils, coffee beans, corn, wheat products, sugar cane and meat products. These commodity purchase contracts generally are not subject to the accounting requirements for derivative instruments and hedging activities under the normal purchases and normal sales exception. We also use commodity futures, options, and swaps to economically hedge the price of certain commodity costs, including the commodities noted above, as well as diesel fuel, packaging products, and natural gas. We do not designate these commodity contracts as hedging instruments. We also occasionally use futures to economically cross hedge a commodity exposure.

Available-for-sale securities:

We invest in certain marketable fixed-income debt securities that are classified as available-for-sale. Our available-for-sale securities are reported at fair value based on pricing models and quoted market prices adjusted for credit and non-performance risk. Highly liquid investments with maturities of 90 days or less are included in cash and cash equivalents on our consolidated balance sheets. Investments with maturities of greater than 90 days but less than 12 months are presented as marketable securities on our consolidated balance sheets. We did not hold any investments with maturities exceeding 12 months.

Unrealized holding gains/(losses) are deferred into accumulated other comprehensive income/(losses) until the security is settled or sold. We regularly evaluate our available-for-sale debt securities for expected credit and non-credit related losses. In making these assessments, we evaluate, among other things, the financial condition and credit quality of the issuer, as well as our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. Credit-related losses are recognized through other expense/(income) in the period incurred, and non-credit related losses are deferred into accumulated other comprehensive income/(losses) until the related securities are sold.

See Note 13, Financial Instruments, for additional information.

Translation of Foreign Currencies:

For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period end. Income statement accounts are translated at the average rate of exchange prevailing during the period. Foreign currency translation adjustments arising from the use of differing exchange rates from period to period are included as a component of accumulated other comprehensive income/(losses) on our consolidated balance sheets. Gains and losses from foreign currency transactions are included in net income/(loss) for the period.

Highly Inflationary Accounting:

We apply highly inflationary accounting if the cumulative inflation rate in an economy for a three-year period meets or exceeds 100%. 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 consolidated statements of income, rather than accumulated other comprehensive income/(losses) on our consolidated balance sheets, until such time as the economy is no longer considered highly inflationary. Certain non-monetary assets and liabilities are recorded at the applicable historical exchange rates. We apply highly inflationary accounting to the results of our subsidiaries in Turkey and Venezuela in all years presented, and Egypt in 2025 and 2024. As a result of applying highly inflationary accounting to the results of our subsidiaries in these countries, we recognized nonmonetary currency devaluation losses in other expense/(income) of $34 million as of December 27, 2025, $16 million as of December 28, 2024, and $28 million as of December 30, 2023. The net monetary assets of each of our subsidiaries in Turkey, Venezuela, and Egypt were insignificant at December 27, 2025. Our results of operations in Turkey, Venezuela, and Egypt reflect those of controlled subsidiaries.

Note 3. 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 completed, the Separation would result in two companies, whose names would be determined at a later date, one of which would focus on Taste Elevation and shelf-stable meals, and the other of which would focus on certain North American staples. If work related to the Separation is resumed, the Separation would be subject to the satisfaction of customary conditions, including final approval by the Board, receipt of favorable tax opinions of our U.S. tax advisors with respect to the tax-free nature of the Separation, and the effectiveness of appropriate filings with the U.S. Securities and Exchange Commission. The timing of the Separation and whether it will be completed is uncertain and we cannot assure that the Separation will be completed on the anticipated timeline or at all or that the terms of the Separation will not change.

We incurred $60 million of separation costs for the year ended December 27, 2025, primarily related to consulting, advisory and employee-related costs. These costs were recognized in SG&A on our consolidated statements of income.

Note 4. New Accounting Standards

Accounting Standards Adopted in the Current Year

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

In December 2023, the FASB issued ASU 2023-09 to improve income tax disclosure requirements under ASC 740, Income Taxes. The guidance requires entities to provide separate information about a reporting entity’s effective tax rate reconciliation and about income taxes paid. We adopted this ASU in the fourth quarter of 2025 and added the required disclosures on a prospective basis in Note 10, Income Taxes. There was no other impact to our financial statement disclosures as a result of adopting this ASU.

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 5. 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 International Developed Markets segment (the “Italy Infant Transaction”). The net assets to be transferred in the Italy Infant Transaction include, among other things, our intellectual property rights to the Plasmon and Nipiol brands and one manufacturing facility in Italy (collectively, the “Italy Infant Disposal Group”).

In the third quarter of 2025, we determined that the Italy Infant Disposal Group met the held for sale criteria. Accordingly, we have presented the assets and liabilities of the Italy Infant Disposal Group as held for sale on the consolidated balance sheet at December 27, 2025. As of July 9, 2025, the date the Italy Infant Disposal Group was determined to be held for sale, we tested the individual assets included within the Italy Infant Disposal Group for impairment. We determined that the net assets of the Italy Infant Disposal Group had an aggregate carrying amount above their estimated fair value less cost to sell, and that the goodwill within the Italy Infant Disposal Group was fully impaired. Accordingly, we recorded a non-cash goodwill impairment loss of $40 million, which was recognized in SG&A, for the year ended December 27, 2025. Further, we recorded an estimated pre-tax loss on sale of business of $47 million for the year ended December 27, 2025, which was recognized in other expense/(income) on our consolidated statement of income.

On December 31, 2025, in the first quarter of our fiscal year 2026, we closed the Italy Infant Transaction for total cash consideration of approximately $146 million.

Russia Infant Transaction:

On March 11, 2024, we closed and finalized the sale of our infant nutrition business in Russia to a third party for total cash consideration of approximately $25 million (the “Russia Infant Transaction”). As a result of the Russia Infant Transaction, we recognized an insignificant pre-tax gain in other expense/(income) on our condensed consolidated statement of income in the first quarter of 2024.

Papua New Guinea Transaction:

On February 5, 2024, we closed and finalized the sale of 100% of the equity interests in our Papua New Guinea subsidiary, Hugo Canning Company Limited, to a third party for total cash consideration of approximately $22 million (the “Papua New Guinea Transaction”). As a result of the Papua New Guinea Transaction, we recognized a pre-tax loss on sale of business of approximately $80 million in other expense/(income) on our condensed consolidated statement of income in the first quarter of 2024, of which approximately $41 million relates to the release of accumulated foreign currency losses.

Deal Costs:

We incurred insignificant deal costs in 2025, 2024, and 2023. We recognized these deal costs in SG&A.

Note 6. Restructuring Activities

As part of our restructuring activities, we incur expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs and other exit costs. Severance and employee benefit costs primarily relate to cash severance, non-cash severance, and pension and other termination benefits. Other exit costs primarily relate to lease and contract terminations. We also incur expenses that are an integral component of, and directly attributable to, our restructuring activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include asset-related costs and other restructuring costs. Asset-related costs primarily relate to accelerated depreciation and asset impairment charges. Other restructuring costs primarily relate to professional fees, asset relocation costs, costs to exit facilities, and costs associated with restructuring benefit plans.

Employee severance and other termination benefit packages are primarily determined based on established benefit arrangements, local statutory requirements, and historical benefit practices. We recognize the contractual component of these benefits when payment is probable and estimable; additional elements of severance and termination benefits associated with non-recurring benefits are recognized ratably over each employee’s required future service period. Charges for accelerated depreciation are recognized on long-lived assets that will be taken out of service before the end of their normal service, in which case depreciation estimates are revised to reflect the use of the asset over its shortened useful life. Asset impairments establish a new fair value basis for assets held for disposal or sale, and those assets are written down to expected net realizable value if carrying value exceeds fair value. All other costs are recognized as incurred.

Restructuring Activities:

We have restructuring programs globally, which are focused primarily on streamlining our organizational design. We eliminated approximately 600 positions in 2025. As of December 27, 2025, we expect to eliminate approximately 60 additional positions in 2026, primarily outside of the United States and Canada. In 2025, restructuring activities resulted in net expenses of $21 million and included a net expense of $14 million of other restructuring costs, a net expense of $9 million of severance and employee benefit costs, a net benefit of $3 million of other exit costs, and a net expense of $1 million of asset-related costs. Restructuring activities resulted in expenses of $20 million in 2024 and $225 million in 2023.

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 28, 2024			$	29					$	11					$	40
Charges/(credits)			9						(3)						6
Cash payments			(29)						(6)						(35)
Balance at December 27, 2025			$	9					$	2					$	11

We expect the liability for severance and employee benefit costs as of December 27, 2025 to be paid by the third quarter 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 term, which expires in 2031.

Total Expenses/(Income):

Total expense/(income) related to restructuring activities by income statement caption, were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Severance and employee benefit costs - Cost of products sold			$	—					$	2					$	9
Severance and employee benefit costs - SG&A			9						19						9
Severance and employee benefit costs - Other expense/(income)			—						—						3
Asset-related costs - Cost of products sold			1						—						42
Asset-related costs - SG&A			—						1						(1)
Other costs - Cost of products sold			—						6						6
Other costs - SG&A			3						(1)						(5)
Other costs - Other expense/(income)			8						(7)						162
			$	21					$	20					$	225

We do not include our restructuring activities within Segment Adjusted Operating Income (as defined in Note 21, Segment Reporting). The pre-tax impact of allocating such expenses/(income) to our segments would have been (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
North America			$	15					$	4					$	15
International Developed Markets			5						(2)						166
Emerging Markets(a)			(6)						9						50
General corporate expenses			7						9						(6)
			$	21					$	20					$	225

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

Note 7. Inventories

Inventories consisted of the following (in millions):

			December 27, 2025						December 28, 2024
Packaging and ingredients			$	870					$	950
Spare parts			264						245
Work in process			278						310
Finished products			1,755						1,871
Inventories			$	3,167					$	3,376

At December 27, 2025, inventories excluded amounts classified as held for sale. See Note 5, Acquisitions and Divestitures, for additional information.

Note 8. Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in millions):

			December 27, 2025						December 28, 2024
Land			$	188					$	193
Buildings and improvements			3,106						2,846
Equipment, software and other			8,519						7,689
Construction in progress			822						1,161
			12,635						11,889
Accumulated depreciation			(5,317)						(4,737)
Property, plant and equipment, net			$	7,318					$	7,152

At December 27, 2025, property, plant and equipment, net, excluded amounts classified as held for sale. Depreciation expense was $722 million in 2025, $696 million in 2024, and $710 million in 2023.

Note 9. Goodwill and Intangible Assets

Goodwill:

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

			North America						International Developed Markets						Emerging Markets						Total
Balance at December 30, 2023			$	27,248					$	2,687					$	524					$	30,459
Impairment losses			(959)						(495)						(184)						(1,638)
Translation adjustments and other			(57)						(58)						(33)						(148)
Balance at December 28, 2024			$	26,232					$	2,134					$	307					$	28,673
Impairment losses			(5,875)						(859)						—						(6,734)
Translation adjustments and other			35						195						10						240
Balance at December 27, 2025			$	20,392					$	1,470					$	317					$	22,179

In 2025, we recorded non-cash goodwill impairment losses of $5.9 billion within our North America segment, $859 million within our International Developed Markets segment, and no impairment losses were recorded within Emerging Markets. These impairments were primarily related to an interim impairment test performed in the second quarter of 2025 resulting from the triggering event discussed below, and $40 million of impairment losses within our International Developed Markets segment related to goodwill attributable to the Italy Infant Disposal Group, which was determined to be fully impaired. The remaining impacts to goodwill in 2025 were related to translation adjustments. See Note 5. Acquisitions and Divestitures, for additional information related to the Italy Infant Transaction and its financial statement impact.

In 2024, we recorded non-cash goodwill impairment losses of $959 million within our North America segment, $495 million within our International Developed Markets segment, and $184 million within Emerging Markets as a result of our 2024 goodwill impairment testing discussed below. The remaining impact to goodwill in 2024 primarily related to translation adjustments.

2025 Goodwill Impairment Testing

Q1 2025 Goodwill Impairment Testing

In the first quarter of 2025, certain organizational changes occurred that impacted our reporting unit composition within our International Developed Markets segment (the “Q1 Europe reorganization”). Two of our International Developed Market reporting units — Northern Europe (“NE”) and Continental Europe (“CE”) — were combined into one reporting unit, Western Europe (“WE”). None of our other reporting units were impacted by this reorganization.

As a result of this reorganization, the existing assets and liabilities of the impacted reporting units were combined and we performed an interim impairment test (or transition test) on the affected reporting units on both a pre- and post-reorganization basis. We performed our pre-reorganization and post-reorganization tests as of December 29, 2024, which was our first day of 2025.

As part of our pre-reorganization impairment test of the NE and CE reporting units, and post-reorganization test of the WE reporting unit, we utilized the discounted cash flow method under the income approach to estimate the fair values as of December 29, 2024. As a result of these tests, we concluded that the fair value of these reporting units exceeded their carrying amounts and no impairment was recorded.

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 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 of our Q2 Impairment Test, 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 (“AFH”) reporting unit within our North America segment, as well as $819 million related to our WE reporting unit within our International 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.

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 — TMS, Hydration & Desserts (“HD”), MC, AFH, CNAC, and Other North America — were reorganized into five reporting units: Elevation; Hydration, Desserts, & Meals (“HDM”); Meat, Cheese, Coffee, & Snacks (“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 International Developed Markets segment and Emerging Markets. 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.

As of December 27, 2025, we maintain 10 reporting units globally, six of which comprise our goodwill balance. These six reporting units had an aggregate goodwill carrying amount of $22.2 billion at December 27, 2025.

Accumulated impairment losses to goodwill were $20.2 billion as of December 27, 2025 and $13.5 billion at December 28, 2024.

2024 Goodwill Impairment Testing

On March 31, 2024, which was the first day of our second quarter of 2024, certain organizational changes occurred that impacted our reporting unit composition within our North America segment (the “Q2 North America reorganization”). Two of our North America reporting units — Taste, Meals, and Away From Home (“TMA”), and Fresh, Beverages, and Desserts (“FBD”) — were reorganized into the four reporting units: TMS, HD, MC, and AFH. The CNAC and Other North America reporting units were not impacted by this reorganization.

As a result of the Q2 North America reorganization, we reassigned assets and liabilities to the applicable reporting units and allocated goodwill using the relative fair value approach. We performed an interim impairment test on the affected reporting units on both a pre- and post-reorganization basis.

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

We performed our Q2 North America post-reorganization impairment test as of March 31, 2024, and tested the new North America reporting units (TMS, HD, MC and AFH). We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our Q2 North America post-reorganization impairment test, we recognized a non-cash impairment loss of approximately $854 million in SG&A in our North America segment in the second quarter of 2024. The $854 million impairment loss related to our MC reporting unit, which had a goodwill carrying amount of approximately $2.5 billion after impairment. The impairment of our MC reporting unit was driven by the disaggregation of the former FBD reporting unit, which previously held all the net assets for the HD and MC reporting units as well as the Snacking category of TMS.

We performed our 2024 annual impairment test as of June 30, 2024, which was the first day of our third quarter of 2024. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our 2024 annual impairment test, we recognized non-cash goodwill impairment losses in SG&A of approximately $495 million related to our Continental Europe reporting unit within our International Developed Markets segment, $184 million related to our Latin America (“LATAM”) reporting unit within Emerging Markets, and $105 million related to our AFH reporting unit within our North America segment. The impairment of our Continental Europe reporting unit was primarily driven by a reduction of future year profitability assumptions from prior estimates in non-core categories and the Just Spices business, as well as higher intercompany royalty expenses resulting from a change in our product mix. The impairment of our LATAM reporting unit was primarily driven by a reduction of future year profitability assumptions from prior estimates and negative macroeconomic factors, including weakening of the foreign currency exchange rate of the Brazilian real relative to the U.S. dollar.

2023 Goodwill Impairment Testing

We performed our 2023 annual impairment test as of July 2, 2023, which was the first day of our third quarter of 2023. In performing this test, we incorporated information that was known through the date of filing of our Quarterly Report on Form 10-Q for the period ended September 30, 2023. We utilized the discounted cash flow method under the income approach to estimate the fair value of our reporting units. As a result of our 2023 annual impairment test, we recognized a non-cash goodwill impairment loss of approximately $510 million in SG&A, which included a $452 million impairment loss in our CNAC reporting unit within our North America segment and a $58 million impairment loss in our Continental Europe reporting unit within our International Developed Markets segment. These impairments were primarily driven by an increase in the discount rate, which was impacted by higher interest rates, a decline in market capitalization, and other market inputs.

Additional Goodwill Considerations

Our reporting units that were impaired in 2025, 2024, and 2023 were written down to their respective fair values resulting in zero excess fair value over carrying amount as of the applicable impairment test dates. Following the 2025 annual impairment test, our Elevation, HDM, Western Europe, MCCS, and Canada reporting units had less than 5% fair value over carrying amount with an aggregate goodwill carrying amount of $21.9 billion. Our Asia reporting unit had less than 20% fair value over carrying amount with an aggregate goodwill carrying amount of $314 million as of the 2025 annual impairment test date. Accordingly, these reporting units have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

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 our 2025 annual impairment test as of June 29, 2025, we used discount rates ranging from 7.3% to 14.8% 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 30, 2023			$	38,502
Impairment losses			(1,903)
Translation adjustments and other			(143)
Balance at December 28, 2024			$	36,456
Impairment losses			(2,561)
Translation adjustments and other			270
Balance at December 27, 2025			$	34,165

2025 Indefinite-Lived Intangible Asset Impairment Testing

Our indefinite-lived intangible asset balance primarily consists of a number of individual brands, which had an aggregate carrying amount of $34.2 billion at December 27, 2025.

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 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 Q2 Impairment Test, 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. After these impairments, the aggregate carrying amount of these brands was $13.0 billion.

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.

2024 Indefinite-Lived Intangible Asset Impairment Testing

As a result of our 2024 annual impairment test as of June 30, 2024, we recognized non-cash intangible asset impairment losses of $593 million in SG&A in the third quarter of 2024 related to our Lunchables, Claussen, and Wattie’s brands. We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $560 million in our North America segment and $33 million in our International Developed Markets segment, consistent with ownership of the trademarks. The impairments of the Lunchables and Wattie’s brands were primarily due to a reduction of future year revenue growth and margin assumptions from prior estimates. The impairment of the Claussen brand was primarily due to a reduction of future year margin assumptions from prior estimates.

During the fourth quarter of 2024, we recognized a non-cash intangible asset impairment loss of $1.3 billion in SG&A related to our Oscar Mayer brand. The impairment was due to additional perceived risk in achieving our long-term cash flow forecasts for the meats business.

2023 Indefinite-Lived Intangible Asset Impairment Testing

As a result of our 2023 annual impairment test as of July 2, 2023, we recognized non-cash intangible asset impairment losses of $152 million in SG&A in the third quarter of 2023 related to Maxwell House, Cool Whip, and two other brands. We utilized the relief from royalty method under the income approach to estimate the fair values and recorded non-cash impairment losses of $139 million in our North America segment and $13 million in our International Developed Markets segment, consistent with ownership of the trademarks. The impairment of these four brands was primarily due to an increase in the discount rate, which was impacted by higher interest rates, a decline in market capitalization, and other market inputs, as well as sustained expectations of declining revenue growth in future years, and decreased margin expectations.

As part of our 2023 annual impairment test, we reclassified two indefinite-lived intangible assets to definite-lived intangible assets related to trademarks in our International Developed Markets segment and in Emerging Markets that had a history of impairment and expectations of limited capital investment. After the fair value assessment of these brands as part of our 2023 annual impairment test, we transferred $73 million from indefinite-lived intangible assets to definite-lived trademarks as of July 2, 2023 and recognized six months of amortization expense as of December 30, 2023.

Additional Indefinite-Lived Intangible Asset Considerations

Our brands that were impaired in 2025, 2024, and 2023 were written down to their respective fair values resulting in zero excess fair value over carrying amount as of the applicable impairment test dates. As of the 2025 annual impairment test, brands with 20% or less fair value over carrying amount had an aggregate carrying amount after impairment of $15.0 billion, brands with 20%-50% fair value over carrying amount had an aggregate carrying amount of $17.0 billion, and brands that had over 50% fair value over carrying amount had an aggregate carrying amount of $2.2 billion.

Our brands that had 20% or less excess fair value over carrying amount as of our 2025 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 as of our 2025 annual impairment test, these amounts are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

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 our 2025 annual impairment test as of June 29, 2025, we used discount rates ranging from 8.5% to 12.3%, long-term growth rates ranging from 0.0% to 4.0%, and royalty rates ranging from 5.0% 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):

			December 27, 2025																		December 28, 2024
			Gross						Accumulated Amortization						Net**(a)**						Gross						Accumulated Amortization						Net
Trademarks			$	2,369					$	(1,016)					$	1,353					$	2,392					$	(893)					$	1,499
Customer-related assets			3,704						(1,700)						2,004						3,665						(1,530)						2,135
Other			11						(4)						7						13						(4)						9
			$	6,084					$	(2,720)					$	3,364					$	6,070					$	(2,427)					$	3,643

(a) At December 27, 2025, definite-lived intangible assets excluded amounts classified as held for sale due to the Italy Infant Transaction. See Note 5, Acquisitions and Divestitures, for additional information on amounts held for sale.

2025 Changes in Definite-Lived Assets

Amortization expense for definite-lived intangible assets was $246 million in 2025, $252 million in 2024, and $251 million in 2023. Aside from amortization expense, the change in definite-lived intangible assets from December 28, 2024 to December 27, 2025 primarily related to amounts reclassified to assets held for sale, the impact of foreign currency, and non-cash intangible asset impairment losses of $11 million recognized in the second quarter of 2025 related to two definite-lived intangible assets within our International Developed Markets segment.

We estimate that amortization expense related to definite-lived intangible assets will be approximately $240 million in 2026 and for the following four years from 2027 through 2030.

2024 Changes in Definite-Lived Assets

In the second quarter of 2024, we entered into an amended license agreement to grant us the exclusive, irrevocable, royalty-free, and perpetual right to use certain TGI Friday trademarks to manufacture, distribute, market, and sell certain TGI Friday licensed products (the “TGI Friday License”). The total cash consideration related to the TGI Friday License was approximately $140 million. We recognized this TGI Friday License as a definite-lived intangible asset to be amortized over its 27-year useful life.

In the third quarter of 2024, we recognized non-cash definite-lived intangible asset impairment losses of $128 million in SG&A related to the Just Spices trademark and customer-related assets. We utilized the relief from royalty method under the income approach for the trademark and the distributor method under the income approach for the customer-related assets to estimate the fair values and recorded non-cash impairment losses in our Continental Europe reporting unit within our International Developed Markets segment, consistent with ownership of the trademarks and customer-related assets. The impairments of the Just Spices trademark and the customer-related assets were primarily due to a reduction of future year revenue growth and margin assumptions from prior expectations.

Note 10. Income Taxes

Provision for/(Benefit from) Income Taxes:

Income/(loss) before income taxes and the provision for/(benefit from) income taxes, consisted of the following (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Income/(loss) before income taxes:
United States			$	(5,844)					$	(165)					$	2,324
Non-U.S.			399						1,021						1,309
Total			$	(5,445)					$	856					$	3,633
Provision for/(benefit from) income taxes:
Current:
U.S. federal			$	459					$	627					$	449
U.S. state and local			75						56						88
Non-U.S.			364						284						233
			898						967						770
Deferred:
U.S. federal			(502)						(417)						30
U.S. state and local			(85)						(79)						11
Non-U.S.			92						(2,361)						(24)
			(495)						(2,857)						17
Total provision for/(benefit from) income taxes			$	403					$	(1,890)					$	787

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

As part of our planning for the changes in the international tax environment, as well as to achieve greater operational synergies, we have enacted changes to our corporate entity structure which included a transfer of, and resulted in the movement of, certain business operations to a wholly-owned subsidiary in the Netherlands resulting in a tax benefit of $3.0 billion recorded as a non-U.S. deferred tax asset in December 2024. The deferred tax asset was recognized as a result of the book and tax basis difference on the business transferred to the Netherlands subsidiary with the tax basis determined by reference to the fair value of the business. The determination of the estimated fair value of the transferred business is complex and requires the exercise of substantial judgment due to the use of subjective assumptions in the valuation method used by management. The associated valuation allowance based on our latest assessment of the total tax benefit that is more likely than not to be realized was $0.7 billion as of December 27, 2025 and $0.6 billion as of December 28, 2024, and related to uncertainty in the Pillar Two legislative interpretation. The recognition of our future tax benefits associated with this transaction is dependent upon the acceptance of the business valuation and tax basis step-up by the associated taxing authorities.

We record tax expense/(benefits) related to the exercise of stock options and other equity instruments within our tax provision. Accordingly, we recognized an insignificant tax expense in our consolidated statements of income in 2025, 2024, and 2023 related to the exercise of stock options and other equity instruments.

Effective Tax Rate:

The effective tax rate on income/(loss) before income taxes for the years ended December 27, 2025 differed from the U.S. federal statutory tax rate for the following reasons:

			December 27, 2025
			Amount						Percent
U.S. federal statutory tax rate			$	(1,143)					21.0		%
State and local income taxes, net of federal (national) income tax expense(a)			(23)						0.4		%
Effects of cross-border tax laws			52						(1.0)		%
Nontaxable or nondeductible items
Goodwill impairment			1,105						(20.3)		%
Other			17						(0.3)		%
Other			(22)						0.5		%
Foreign tax effects
Canada
Goodwill impairment			90						(1.7)		%
Other			49						(0.9)		%
United Kingdom
Goodwill impairment			134						(2.5)		%
Other			(13)						0.2		%
Other foreign jurisdictions			57						(1.0)		%
Changes in unrecognized tax benefits			100						(1.8)		%
Effective tax rate			$	403					(7.4)		%

(a) State taxes in Louisiana made up the majority (greater than 50%) of the tax effect in this category.

The effective tax rate on income/(loss) before income taxes for the years ended December 28, 2024 and December 30, 2023 differed from the U.S. federal statutory tax rate for the following reasons:

			December 28, 2024						December 30, 2023
U.S. federal statutory tax rate			21.0		%				21.0		%
Tax on income of non-U.S. subsidiaries			(32.1)		%				(6.6)		%
U.S. state and local income taxes, net of federal tax benefit			0.2		%				1.8		%
Audit settlements and changes in uncertain tax positions			3.1		%				0.3		%
Global intangible low-taxed income			4.7		%				1.4		%
Goodwill impairment			41.3		%				3.6		%
Deferred tax adjustments			(347.8)		%				0.1		%
Movement of valuation allowances			88.3		%				0.1		%
Deferred tax effect of tax law changes			(4.8)		%				0.1		%
Repatriation costs			3.2		%				—		%
Foreign income inclusion			1.9		%				0.5		%
Research and development credits			(1.1)		%				(0.3)		%
Change in prior year estimates			(1.8)		%				(0.7)		%
Equity awards			1.2		%				0.1		%
Other			2.2		%				0.3		%
Effective tax rate			(220.5)		%				21.7		%

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 shown in the table above are affected by income/(loss) before income taxes. The percentage point impacts on the effective tax rates fluctuate due to income/(loss) before income taxes, which included goodwill impairment losses in all years presented in the table. Fluctuations in the amount of income generated across locations around the world could impact comparability of reconciling items between periods. Additionally, small movements in tax rates due to a change in tax law or a change in tax rates that causes us to revalue our deferred tax balances produces volatility in our effective tax rate.

Our 2025 effective tax rate was an expense of 7.4% on pre-tax loss. Our effective tax rate was unfavorably impacted by non-deductible goodwill impairments.

Our 2024 effective tax rate was a benefit of 220.5% on pre-tax income. Our effective tax rate was favorably impacted by recognizing a non-U.S. deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands and the geographic mix of pre-tax income in various non-U.S. jurisdictions. This impact was partly offset by establishing a partial valuation allowance against the Netherlands deferred tax asset and a full valuation allowance against the Brazil net deferred tax assets and non-deductible goodwill impairments.

The 2025 and 2024 year-over-year increase in the effective tax rate was due primarily to higher non-deductible goodwill impairments in the current year and recognizing a non-U.S. deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands offset by establishing valuation allowances on certain non-U.S. deferred tax assets in the prior year.

Our 2023 effective tax rate was an expense of 21.7% on pre-tax income. Our effective tax rate was favorably impacted by geographic mix of pre-tax income in various non-U.S. jurisdictions. These impacts were partially offset by the impact of certain unfavorable rate reconciling items, primarily non-deductible goodwill impairments and the impact of the federal tax on global intangible low-taxed income (“GILTI”).

The 2024 and 2023 year-over-year decrease in the effective tax rate was due primarily to recognizing a non-U.S. deferred tax asset as a result of the movement of certain business operations to a wholly-owned subsidiary in the Netherlands offset by establishing valuation allowances on certain non-U.S. deferred tax assets in the current year versus the prior year.

See Note 9, Goodwill and Intangible Assets, for additional information related to our impairment losses.

Deferred Income Tax Assets and Liabilities:

The tax effects of temporary differences and carryforwards that gave rise to deferred income tax assets and liabilities consisted of the following (in millions):

			December 27, 2025						December 28, 2024
Deferred income tax liabilities:
Intangible assets			$	8,697					$	9,310
Property, plant and equipment, net			768						673
Right-of-use assets			101						104
Other			344						400
Deferred income tax liabilities			9,910						10,487
Deferred income tax assets:
Intangible assets			(3,171)						(2,959)
Deferred income			(317)						(328)
Loss carryforwards			(317)						(277)
Lease liabilities			(109)						(114)
Other			(545)						(441)
Deferred income tax assets			(4,459)						(4,119)
Valuation allowance			932						851
Net deferred income tax liabilities			$	6,383					$	7,219

The decrease in net deferred income tax liabilities from December 28, 2024 to December 27, 2025 was primarily driven by a reduction of $625 million due to the impairment of intangible assets.

As of December 27, 2025, non-U.S. operating loss carryforwards totaled $956 million. Of that amount, $52 million expire between 2026 and 2037; the other $904 million do not expire. We have recorded $274 million of deferred tax assets related to these non-U.S. operating loss carryforwards. Deferred tax assets of $26 million have been recorded for U.S. state and local operating loss carryforwards. These losses expire between 2026 and 2042. As of December 27, 2025, tax credit carryforwards totaled $25 million, which primarily include state tax credits of $11 million, and $14 million in other tax credits.

Uncertain Tax Positions:

As of December 27, 2025, our unrecognized tax benefits for uncertain tax positions were $480 million. If we had recognized all of these benefits, the impact on our effective tax rate would have been $455 million. Our unrecognized tax benefits for uncertain tax positions are included in income taxes payable and other non-current liabilities on our consolidated balance sheets.

The changes in our unrecognized tax benefits were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Balance at the beginning of the period			$	400					$	443					$	455
Increases for tax positions of prior years			21						27						46
Decreases for tax positions of prior years			(16)						(14)						(5)
Increases based on tax positions related to the current year			97						45						67
Decreases due to settlements with taxing authorities			(6)						(84)						(28)
Decreases due to lapse of statute of limitations			(16)						(17)						(92)
Balance at the end of the period			$	480					$	400					$	443

Our unrecognized tax benefits increased during 2025 mainly as a result of a net increase for tax positions related to the current and prior years in the U.S. and certain state and non-U.S. jurisdictions, which were partially offset by decreases related to audit settlements with certain state and non-U.S. taxing authorities and statute of limitations expirations.

Our unrecognized tax benefits decreased during 2024 mainly related to audit settlements with state, and non-U.S. taxing authorities and statute of limitations expirations partially offset by a net increase for tax positions related to the current and prior years in the U.S. and certain state and non-U.S. jurisdictions.

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

We include interest and penalties related to uncertain tax positions in our tax provision. Our provision for income taxes included a $26 million expense in 2025, a $19 million benefit in 2024, and a $1 million expense in 2023 related to interest and penalties. Accrued interest and penalties were $109 million as of December 27, 2025 and $83 million as of December 28, 2024.

Cash Paid for Income Taxes:

Income taxes paid in cash were as follows (in millions):

			December 27, 2025
Federal			$	419
State			57
Foreign			245
Total			$	721

We paid income taxes, net of refunds, of $721 million in 2025, $967 million in 2024, and $932 million in 2023.

The following jurisdictions each accounted for more than 5% of total income taxes paid, net of refunds (in millions):

			December 27, 2025
Foreign
Canada			$	39
Netherlands			78
United Kingdom			53

Other Income Tax Matters:

Tax Examinations:

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 the

third quarter of 2025, we received a NOPA 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 penalties for each year. In the fourth quarter of 2025, we received a NOPA asserting penalties of approximately $85 million for each of the years of 2020, 2021, and 2022. 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.

In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Brazil, Canada, Italy, the Netherlands, the United Kingdom, and the United States. As of December 27, 2025, we have substantially concluded all national income tax matters through 2022 for the United Kingdom, through 2019 for the Netherlands and for Italy, with the exception of 2015 for Italy which is under litigation, through 2017 for the United States and Canada, and through 2011 for Brazil, with the exception of 2007 and 2008 which are under litigation. We have concluded all U.S. state income tax matters through 2010.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. The OBBBA includes changes to U.S. tax law that was applicable to the Company beginning in 2025. These changes include provisions allowing accelerated tax deductions for qualified property and research and development expenditures. The OBBBA did not have a significant impact on our total tax provision as of December 27, 2025, and we do not expect the elective provisions of the law to have a material impact on our future effective tax rate. 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.

Cash 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 2025 accumulated earnings of certain international subsidiaries is approximately $65 million. Our undistributed historic earnings in foreign subsidiaries through December 31, 2017 are currently not considered to be indefinitely reinvested. Our deferred tax liability associated with these undistributed historical earnings was insignificant at December 27, 2025 and December 28, 2024, and relates to local withholding taxes that would be owed when this cash is distributed.

Note 11. Employees’ Stock Incentive Plans

We grant equity awards, including stock options, restricted stock units (“RSUs”), and performance share units (“PSUs”), to select employees to provide long-term performance incentives to our employees.

Stock Plans

We had activity related to equity awards from the following plans in 2025, 2024, and 2023:

2020 Omnibus Incentive Plan:

In May 2020, our stockholders approved The Kraft Heinz Company 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”), which was adopted by our Board of Directors (“Board”) in March 2020. The 2020 Omnibus Plan became effective March 2, 2020 (the “Plan Effective Date”) and will expire on the tenth anniversary of the Plan Effective Date. The 2020 Omnibus Plan authorizes the issuance of up to 36 million shares of our common stock for awards to employees, non-employee directors, and other key personnel. The 2020 Omnibus Plan provides for the grant of options, stock appreciation rights, restricted stock, RSUs, deferred stock, performance awards, other stock-based awards, and cash-based awards. Equity awards granted under the 2020 Omnibus Plan include awards that vest in full at the end of a three-year period as well as awards that vest in annual installments over three or four years beginning on the second anniversary of the original grant date. Non-qualified stock options have a maximum exercise term of 10 years from the date of the grant. As of the Plan Effective Date, awards will no longer be granted under The Kraft Heinz Company 2016 Omnibus Incentive Plan, the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan, Kraft Foods Group, Inc. 2012 Performance Incentive Plan (“2012 Performance Incentive Plan”), or any other equity plans other than the 2020 Omnibus Plan.

2016 Omnibus Incentive Plan:

In April 2016, our stockholders approved The Kraft Heinz Company 2016 Omnibus Incentive Plan (“2016 Omnibus Plan”), which was adopted by our Board in February 2016. The 2016 Omnibus Plan authorized grants of up to 18 million shares of our common stock pursuant to options, stock appreciation rights, RSUs, deferred stock, performance awards, investment rights, other stock-based awards, and cash-based awards. Equity awards granted under the 2016 Omnibus Plan prior to 2019 generally vest in full at the end of a five-year period. Equity awards granted under the 2016 Omnibus Plan in 2019 include awards that vest in full at the end of three and five-year periods as well as awards that become exercisable in annual installments over three to four years beginning on the second anniversary of the original grant date. Non-qualified stock options have a maximum exercise term of 10 years. Equity awards granted under the 2016 Omnibus Plan since inception include non-qualified stock options, RSUs, and PSUs.

2013 Omnibus Incentive Plan:

Prior to approval of the 2016 Omnibus Plan, we issued non-qualified stock options to select employees under the H. J. Heinz Holding Corporation 2013 Omnibus Incentive Plan (“2013 Omnibus Plan”). As a result of the 2015 Merger, each outstanding Heinz stock option was converted into 0.443332 of a Kraft Heinz stock option. Following this conversion, the 2013 Omnibus Plan authorized the issuance of up to 17,555,947 shares of our common stock. Non-qualified stock options awarded under the 2013 Omnibus Plan vest in full at the end of a five-year period and have a maximum exercise term of 10 years. These non-qualified stock options have vested and become exercisable in accordance with the terms and conditions of the 2013 Omnibus Plan and the relevant award agreements.

Kraft 2012 Performance Incentive Plan:

Prior to the 2015 Merger, Kraft issued equity-based awards, including stock options and RSUs, under the 2012 Performance Incentive Plan. As a result of the 2015 Merger, each outstanding Kraft stock option was converted into an option to purchase a number of shares of our common stock based upon an option adjustment ratio, and each outstanding Kraft RSU was converted into one Kraft Heinz RSU. These options generally become exercisable in three annual installments beginning on the first anniversary of the original grant date, and have a maximum exercise term of 10 years. These RSUs generally vest in full on the third anniversary of the original grant date. In accordance with the terms of the 2012 Performance Incentive Plan, vesting generally accelerated for holders of Kraft awards who were terminated without cause within 2 years of the 2015 Merger Date. These Kraft Heinz equity awards have vested and become exercisable in accordance with the terms and conditions that were applicable immediately prior to the completion of the 2015 Merger.

In addition, prior to the 2015 Merger, Kraft issued performance-based, long-term incentive awards (“Kraft Performance Shares”), which vested based on varying performance, market, and service conditions. In connection with the 2015 Merger, all outstanding Kraft Performance Shares were converted into cash awards, payable in two installments: (i) a 2015 pro-rata payment based upon the portion of the Kraft Performance Share cycle completed prior to the 2015 Merger and (ii) the remaining value of the award to be paid on the earlier of the first anniversary of the closing of the 2015 Merger and a participant's termination without cause.

Stock Options

We use the Black-Scholes model to estimate the fair value of stock option grants. Our weighted average Black-Scholes fair value assumptions were:

			December 27, 2025						December 28, 2024						December 30, 2023
Risk-free interest rate			4.00		%				4.09		%				4.08		%
Expected term			5.8 years						6.5 years						6.5 years
Expected volatility			25.8		%				25.0		%				26.7		%
Expected dividend yield			5.3		%				4.3		%				4.0		%
Weighted average grant date fair value per share			$	4.90					$	6.46					$	8.00

The risk-free interest rate represented the constant maturity U.S. Treasury rate in effect at the grant date, with a remaining term equal to the expected term of the options. The expected term is the period over which our employees are expected to hold their options and is derived using historical data. We estimated volatility using a blended volatility approach of term-matched historical volatility from our daily stock prices and weighted average implied volatility. We estimated the expected dividend yield using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded.

Our stock option activity and related information was:

			Number of Stock Options						Weighted Average Exercise Price (per share)						Aggregate Intrinsic Value (in millions)						Average Remaining Contractual Term
Outstanding at December 28, 2024			6,720,421						$	46.44
Granted			936,208						30.71
Forfeited			(2,096,791)						50.51
Exercised			(39,355)						25.41
Outstanding at December 27, 2025			5,520,483						42.37						$	—					5 years
Exercisable at December 27, 2025			3,474,156						47.25						—						3 years

The aggregate intrinsic value of stock options exercised during the period was insignificant in 2025 and 2024, and $11 million in 2023.

Cash received from options exercised was insignificant in 2025 and 2024, and $43 million in 2023. The tax benefit realized from stock options exercised were insignificant in 2025, 2024, and 2023.

Our unvested stock options and related information was:

			Number of Stock Options						Weighted Average Grant Date Fair Value (per share)
Unvested options at December 28, 2024			1,964,129						$	7.01
Granted			936,208						4.90
Forfeited			(180,654)						7.14
Vested			(673,356)						6.50
Unvested options at December 27, 2025			2,046,327						6.20

Restricted Stock Units

RSUs represent a right to receive one share or the value of one share upon the terms and conditions set forth in the applicable plan and award agreement.

All outstanding RSUs are dividend eligible. We used the stock price on the grant date to estimate the fair value of our RSUs. The grant date fair value of RSUs is amortized to expense over the vesting period.

The weighted average grant date fair value per share of our RSUs granted during the year was $30.81 in 2025, $35.39 in 2024, and $38.24 in 2023.

Our RSU activity and related information was:

			Number of Units						Weighted Average Grant Date Fair Value (per share)
Outstanding at December 28, 2024			6,705,507						$	37.31
Granted			2,917,867						30.81
Forfeited			(960,191)						34.70
Vested			(2,051,539)						38.28
Outstanding at December 27, 2025			6,611,644						34.52

The aggregate fair value of RSUs that vested during the period was $62 million in 2025, $119 million in 2024, and $134 million in 2023.

Performance Share Units

PSUs represent a right to receive one share or the value of one share upon the terms and conditions set forth in the applicable plan and award agreement and are subject to achievement or satisfaction of performance or market conditions specified by the Compensation Committee of our Board.

For our PSUs that are tied to performance conditions, we used the stock price on the grant date to estimate the fair value. The PSUs are not dividend eligible; therefore, we discounted the fair value of the PSUs based on the dividend yield. Dividend yield was estimated using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded. The grant date fair value of PSUs is amortized to expense on a straight-line basis over the requisite service period for each separately vesting portion of the awards. We adjust the expense based on the likelihood of future achievement of performance metrics.

For our PSUs that are tied to market-based conditions, the grant date fair value was determined based on a Monte Carlo simulation model, which takes into account expected volatility and dividend yield, among other things. The related compensation expense is recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. The final award is based on the achievement of market-based components and service-based vesting conditions and may equal 0% to 150% of the target grant amount, based on achievement of the market-based conditions.

The weighted average grant date fair value per share of our PSUs granted during the year was $30.48 in 2025, $29.14 in 2024, and $33.33 in 2023. Our expected dividend yield was 5.28% in 2025, 4.33% in 2024, and 3.95% in 2023. For our PSUs that are tied to market-based conditions, our expected volatility was 21.26% in 2025 and 21.28% in 2024 and 24.48% in 2023.

Our PSU activity and related information was:

			Number of Units						Weighted Average Grant Date Fair Value (per share)
Outstanding at December 28, 2024			5,389,930						$	31.77
Granted			3,188,751						30.48
Forfeited(a)			(2,482,016)						31.89
Vested			(636,428)						34.47
Outstanding at December 27, 2025			5,460,237						30.64

(a) Includes PSUs forfeited due to employee terminations and performance conditions that were not satisfied.

The aggregate fair value of PSUs that vested during the period was $20 million in 2025, $40 million in 2024, and $33 million in 2023.

Total Equity Awards

Equity award compensation cost and the related tax benefit was (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Pre-tax compensation cost			$	95					$	109					$	141
Related tax benefit			(18)						(24)						(32)
After-tax compensation cost			$	77					$	85					$	109

Unrecognized compensation cost related to unvested equity awards was $150 million at December 27, 2025 and is expected to be recognized over a weighted average period of 2 years.

Note 12. Postemployment Benefits

We maintain various retirement plans for the majority of our employees. Current defined benefit pension plans are provided primarily for certain domestic union and foreign employees. Local statutory requirements govern many of these plans. The pension benefits of our unionized workers are in accordance with the applicable collective bargaining agreement covering their employment. Defined contribution plans are provided for certain domestic unionized, non-union hourly, and salaried employees as well as certain employees in foreign locations.

We provide health care and other postretirement benefits to certain of our eligible retired employees and their eligible dependents. Certain of our U.S. and Canadian employees may become eligible for such benefits. We may modify plan provisions or terminate plans at our discretion. The postretirement benefits of our unionized workers are in accordance with the applicable collective bargaining agreement covering their employment.

We remeasure our postemployment benefit plans at least annually.

Pension Plans

Obligations and Funded Status:

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

			U.S. Plans												Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Benefit obligation at beginning of year			$	2,461					$	2,681					$	1,065					$	1,210
Service cost			1						1						6						7
Interest cost			121						135						58						55
Benefits paid			(148)						(212)						(83)						(77)
Actuarial losses/(gains)(a)			188						(144)						(28)						(124)
Plan amendments			—						—						4						13
Currency			—						—						72						(19)
Settlements(b)			(309)						—						—						—
Special/contractual termination benefits			—						—						1						—
Other			—						—						12						—
Benefit obligation at end of year			2,314						2,461						1,107						1,065
Fair value of plan assets at beginning of year			2,973						3,139						1,368						1,528
Actual return on plan assets			244						46						78						(43)
Employer contributions			—						—						5						(22)
Benefits paid			(148)						(212)						(83)						(77)
Currency			—						—						98						(18)
Settlements(b)			(309)						—						—						—
Fair value of plan assets at end of year			2,760						2,973						1,466						1,368
Net pension liability/(asset) recognized at end of year			$	(446)					$	(512)					$	(359)					$	(303)

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

(b) Settlements represent lump sum payments of $309 million in 2025.

The accumulated benefit obligation, which represents benefits earned to the measurement date, was $2.3 billion at December 27, 2025 and $2.5 billion at December 28, 2024 for the U.S. pension plans. The accumulated benefit obligation for the non-U.S. pension plans was $1.1 billion at December 27, 2025 and $1.0 billion at December 28, 2024.

The combined U.S. and non-U.S. pension plans resulted in net pension assets of $805 million at December 27, 2025 and $815 million at December 28, 2024. We recognized these amounts on our consolidated balance sheets as follows (in millions):

			December 27, 2025						December 28, 2024
Other non-current assets			$	871					$	878
Other current liabilities			(4)						(5)
Accrued postemployment costs			(62)						(58)
Net pension asset/(liability) recognized			$	805					$	815

For certain of our U.S. and non-U.S. plans that were underfunded based on accumulated benefit obligations in excess of plan assets, the projected benefit obligations, accumulated benefit obligations, and the fair value of plan assets were (in millions):

			U.S. Plans												Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Projected benefit obligation			$	—					$	—					$	81					$	81
Accumulated benefit obligation			—						—						76						75
Fair value of plan assets			—						—						15						17

Our U.S. plans were overfunded based on plan assets in excess of accumulated benefit obligations as of December 27, 2025 and December 28, 2024.

For certain of our U.S. and non-U.S. plans that were underfunded based on projected benefit obligations in excess of plan assets, the projected benefit obligations, accumulated benefit obligations, and the fair value of plan assets were (in millions):

			U.S. Plans												Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Projected benefit obligation			$	—					$	—					$	81					$	94
Accumulated benefit obligation			—						—						76						88
Fair value of plan assets			—						—						15						31

Our U.S. plans were overfunded based on plan assets in excess of projected benefit obligations as of December 27, 2025 and December 28, 2024.

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

			U.S. Plans												Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Discount rate			5.0		%				5.8		%				5.4		%				5.5		%
Rate of compensation increase			4.0		%				4.0		%				3.5		%				3.7		%

Discount rates for our U.S. and non-U.S. plans were developed from a model portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans.

Components of Net Pension Cost/(Benefit):

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

			U.S. Plans																		Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 30, 2023						December 27, 2025						December 28, 2024						December 30, 2023
Service cost			$	1					$	1					$	2					$	6					$	7					$	7
Interest cost			121						135						142						58						55						65
Expected return on plan assets			(186)						(197)						(196)						(88)						(84)						(88)
Amortization of prior service costs/(credits)			1						1						—						2						1						1
Amortization of unrecognized losses/(gains)			—						—						—						14						13						13
Settlements			11						—						—						—						—						146
Special/contractual termination benefits			—						—						—						1						(1)						2
Other			—						—						—						12						(7)						16
Net pension cost/(benefit)			$	(52)					$	(60)					$	(52)					$	5					$	(16)					$	162

We present all non-service cost components of net pension cost/(benefit) within other expense/(income) on our consolidated statements of income. In 2023, we recognized settlement charges of $146 million and other related costs of $16 million related to the settlement of one of our U.K. defined benefit pension plans, which resulted in pre-tax losses of $162 million within other expense/(income).

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

			U.S. Plans																		Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 30, 2023						December 27, 2025						December 28, 2024						December 30, 2023
Discount rate - Service cost			5.9		%				5.4		%				5.7		%				5.9		%				5.1		%				5.3		%
Discount rate - Interest cost			5.3		%				5.2		%				5.5		%				5.3		%				4.7		%				5.0		%
Expected rate of return on plan assets			6.8		%				6.6		%				6.6		%				6.3		%				5.7		%				5.1		%
Rate of compensation increase			4.0		%				4.0		%				4.0		%				3.7		%				3.6		%				3.8		%

Discount rates for our U.S. and non-U.S. plans were developed from a model portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans. We determine our expected rate of return on plan assets from the plan assets' historical long-term investment performance, target asset allocation, and estimates of future long-term returns by asset class.

Plan Assets:

The underlying basis of the investment strategy of our defined benefit plans is to ensure that pension funds are available to meet the plans’ benefit obligations when they are due. Our investment objectives include: investing plan assets in a high-quality, diversified manner in order to maintain the security of the funds; achieving an optimal return on plan assets within specified risk tolerances; and investing according to local regulations and requirements specific to each country in which a defined benefit plan operates. The investment strategy expects equity investments to yield a higher return over the long term than fixed-income securities, while fixed-income securities are expected to provide certain matching characteristics to the plans’ benefit payment cash flow requirements. Our investment policy specifies the type of investment vehicles appropriate for the applicable plan, asset allocation guidelines, criteria for the selection of investment managers, and procedures to monitor overall investment performance as well as investment manager performance. It also provides guidelines enabling the applicable plan fiduciaries to fulfill their responsibilities.

Our weighted average asset allocations were:

			U.S. Plans												Non-U.S. Plans
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Fixed-income securities			51		%				71		%				55		%				73		%
Equity securities			11		%				10		%				3		%				13		%
Alternative investments, including real assets and other fixed income			19		%				18		%				1		%				9		%
Cash and cash equivalents			19		%				1		%				40		%				4		%
Certain insurance contracts			—		%				—		%				1		%				1		%
Total			100		%				100		%				100		%				100		%

Our pension investment strategy for the U.S. plans is designed to align our pension assets with our projected benefit obligation to reduce volatility. We target an investment of approximately 68% of our U.S. plans assets in fixed-income securities, approximately 18% in alternatives, primarily real assets and diversified credit, and approximately 14% in return-seeking assets, primarily equity securities.

For pension plans outside the United States, our investment strategy is subject to local regulations and the asset/liability profiles of the plans in each individual country. In aggregate, the long-term asset allocation targets of our non-U.S. plans are broadly characterized as a mix of approximately 95% in cash and cash equivalents, fixed-income securities, and alternatives, primarily multi-asset credit, approximately 3% in return-seeking assets, primarily equity securities, and approximately 2% in certain insurance contracts.

Our weighted average pension asset allocations for our U.S. plans deviate from our target allocations due to a rebalancing of our plan asset portfolio, which was in process as of December 27, 2025. We expect our pension asset allocations to more closely align to our pension investment target once those activities are completed.

The fair value of pension plan assets at December 27, 2025 was determined using the following fair value measurements (in millions):

Asset Category			Total Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Government bonds			$	917					$	495					$	422					$	—
Corporate bonds and other fixed-income securities			493						—						493						—
Total fixed-income securities			1,410						495						915						—
Cash and cash equivalents			621						621						—						—
Other			(2)						—						(2)						—
Certain insurance contracts			19						—						—						19
Fair value excluding investments measured at net asset value			2,048						$	1,116					$	913					$	19
Investments measured at net asset value(a)			2,178
Total plan assets at fair value			$	4,226

(a) Amount includes cash collateral of $36 million associated with our securities lending program, which is reflected as an asset, and a corresponding securities lending payable of $36 million, which is reflected as a liability. The net impact on total plan assets at fair value is zero.

The fair value of pension plan assets at December 28, 2024 was determined using the following fair value measurements (in millions):

Asset Category			Total Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Government bonds			$	698					$	263					$	435					$	—
Corporate bonds and other fixed-income securities			1,942						—						1,942						—
Total fixed-income securities			2,640						263						2,377						—
Cash and cash equivalents			48						48						—						—
Other			8						—						8						—
Certain insurance contracts			23						—						—						23
Fair value excluding investments measured at net asset value			2,719						$	311					$	2,385					$	23
Investments measured at net asset value(a)			1,622
Total plan assets at fair value			$	4,341

(a) Amount includes cash collateral of $164 million associated with our securities lending program, which is reflected as an asset, and a corresponding securities lending payable of $164 million, which is reflected as a liability. The net impact on total plan assets at fair value is zero.

The following section describes the valuation methodologies used to measure the fair value of pension plan assets, including an indication of the level in the fair value hierarchy in which each type of asset is generally classified.

Government Bonds. These securities consist of direct investments in publicly traded U.S. fixed interest obligations (principally debentures) and non-U.S. government bonds, including any related repurchases agreements. U.S. government bonds are valued using quoted prices in active markets and are included in Level 1. Non-U.S. government bonds are generally valued using observable inputs and are included in Level 2. Additionally, repurchase agreements related to the non-U.S. government bonds are valued at the contract price plus accrued interest and are included in Level 2.

Corporate Bonds and Other Fixed-Income Securities. These securities consist of publicly traded U.S. and non-U.S. fixed interest obligations (principally corporate bonds and tax-exempt municipal bonds). Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. As such, these securities are included in Level 2.

Cash and Cash Equivalents. This consists of direct cash holdings and institutional short-term investment vehicles. Direct cash holdings are valued based on cost, which approximates fair value and are classified as Level 1. Certain institutional short-term investment vehicles are valued daily and are classified as Level 1. Other cash equivalents that are not traded on an active exchange, such as bank deposits, are classified as Level 2.

Other. This consists of derivative financial instruments including foreign currency forward contracts, futures contracts, options contracts, interest rate swaps, inflation swaps and credit default swaps. Derivative financial instruments are valued based on observable market transactions or prices and classified as Level 2.

Certain Insurance Contracts. This category consists of group annuity contracts that have been purchased to cover a portion of the plan members and have been classified as Level 3.

Investments Measured at Net Asset Value. This category consists of pooled funds, short-term investments, and corporate feeder interests.

*•*Pooled funds. The fair values of participation units held in collective trusts are based on their net asset values, as reported by the managers of the collective trusts and as supported by the unit prices of actual purchase and sale transactions occurring as of or close to the financial statement date. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. Investments in the collective trusts can be redeemed daily, monthly, or quarterly based upon the applicable net asset value per unit and the terms of the specific trust agreements.

The mutual fund investments are not traded on an exchange, and a majority of these funds are held in a separate account managed by a fixed income manager. The fair values of these investments are based on their net asset values, as reported by the managers and as supported by the unit prices of actual purchase and sale transactions occurring as of or close to the financial statement date. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. The objective of the account is to provide superior return with reasonable risk, where performance is expected to exceed Barclays Long U.S. Credit Index. Investments in this account can be redeemed with a written notice to the investment manager.

*•*Short-term investments. Short-term investments, including cash and cash equivalents, largely consist of a money market fund, the fair value of which is based on the net asset value reported by the manager of the fund and supported by the unit prices of actual purchase and sale transactions. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. The money market fund is designed to provide safety of principal, daily liquidity, and a competitive yield by investing in high quality money market instruments. The investment objective of the money market fund is to provide the highest possible level of current income while still maintaining liquidity and preserving capital.

*•*Corporate feeder interests. The fair values of the corporate feeder are based upon the net asset values of the equity master fund in which it invests. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. Investments in the corporate feeder can be redeemed quarterly with at least 90 days’ notice. The investment objective of the corporate feeder is to generate long-term returns by investing in large, liquid equity securities with attractive fundamentals.

Changes in our Level 3 plan assets for the year ended December 27, 2025 included (in millions):

Asset Category			December 28, 2024						Additions						Net Realized Gain/(Loss)						Net Unrealized Gain/(Loss)						Net Purchases, Issuances and Settlements						Transfers Into/(Out of) Level 3						December 27, 2025
Certain insurance contracts			$	23					$	—					$	—					$	—					$	(4)					$	—					$	19
Total Level 3 investments			$	23					$	—					$	—					$	—					$	(4)					$	—					$	19

Changes in our Level 3 plan assets for the year ended December 28, 2024 included (in millions):

Asset Category			December 30, 2023						Additions						Net Realized Gain/(Loss)						Net Unrealized Gain/(Loss)						Net Purchases, Issuances and Settlements						Transfers Into/(Out of) Level 3						December 28, 2024
Certain insurance contracts			$	27					$	—					$	—					$	—					$	(4)					$	—					$	23
Total Level 3 investments			$	27					$	—					$	—					$	—					$	(4)					$	—					$	23

Employer Contributions:

We contributed $5 million in 2025, $7 million in 2024, and $11 million in 2023 to our non-U.S. pension plans. We did not contribute to our U.S. pension plans in 2025, 2024, or 2023. We estimate that 2026 pension contributions will be approximately $6 million to our non-U.S. pension plans. We do not plan to make contributions to our U.S. pension plans in 2026. Estimated future contributions take into consideration current economic conditions, which at this time are expected to have minimal impact on expected contributions for 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.

In 2024, we received the distribution of a surplus asset in the amount of $29 million, net of tax, related to the 2023 settlement of one of our U.K. defined benefit pension plans. We treated this cash inflow as a negative contribution within operating activities on the consolidated statements of cash flows.

Future Benefit Payments:

The estimated future benefit payments from our pension plans at December 27, 2025 were (in millions):

			U.S. Plans						Non-U.S. Plans
2026			$	206					$	77
2027			202						77
2028			196						79
2029			191						78
2030			186						80
2031-2035			832						408

Postretirement Plans

Obligations and Funded Status:

The accumulated benefit obligation, fair value of plan assets, and funded status of our postretirement benefit plans were (in millions):

			December 27, 2025						December 28, 2024
Benefit obligation at beginning of year			$	603					$	683
Service cost			2						2
Interest cost			30						33
Benefits paid			(65)						(69)
Actuarial losses/(gains)(a)			13						(39)
Currency			4						(7)
Benefit obligation at end of year			587						603
Fair value of plan assets at beginning of year			793						926
Actual return on plan assets			65						75
Employer contributions(b)			(190)						(139)
Benefits paid			(65)						(69)
Fair value of plan assets at end of year			603						793
Net postretirement benefit liability/(asset) recognized at end of year			$	(16)					$	(190)

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

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

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

			December 27, 2025						December 28, 2024
Other non-current assets			$	92					$	271
Other current liabilities			(5)						(6)
Accrued postemployment costs			(71)						(75)
Net postretirement benefit asset/(liability) recognized			$	16					$	190

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

			December 27, 2025						December 28, 2024
Accumulated benefit obligation			$	77					$	81

We used the following weighted average assumptions to determine our postretirement benefit obligations:

			December 27, 2025						December 28, 2024
Discount rate			5.0		%				5.5		%
Health care cost trend rate assumed for next year			6.5		%				6.2		%
Ultimate trend rate			4.8		%				4.8		%

Discount rates for our plans were developed from a model portfolio of high-quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans. Our expected health care cost trend rate is based on historical costs and our expectation for health care cost trend rates going forward.

The year that the health care cost trend rate reaches the ultimate trend rate varies by plan and ranges between 2027 and 2035 as of December 27, 2025. Assumed health care costs trend rates have a significant impact on the amounts reported for the postretirement benefit plans.

Components of Net Postretirement Cost/(Benefit):

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

			December 27, 2025						December 28, 2024						December 30, 2023
Service cost			$	2					$	2					$	3
Interest cost			30						33						37
Expected return on plan assets			(49)						(55)						(53)
Amortization of prior service costs/(credits)			(10)						(12)						(15)
Amortization of unrecognized losses/(gains)			(26)						(22)						(17)
Net postretirement cost/(benefit)			$	(53)					$	(54)					$	(45)

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

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

			December 27, 2025						December 28, 2024						December 30, 2023
Discount rate - Service cost			5.6		%				5.2		%				5.5		%
Discount rate - Interest cost			5.2		%				5.1		%				5.4		%
Expected rate of return on plan assets			6.3		%				6.3		%				6.3		%
Health care cost trend rate			6.5		%				6.2		%				6.2		%

Discount rates for our plans were developed from a model portfolio of high-quality, fixed-income debt instruments with durations that match the expected future cash flows of the plans. We determine our expected rate of return on plan assets from the plan assets' target asset allocation and estimates of future long-term returns by asset class. Our expected health care cost trend rate is based on historical costs and our expectation for health care cost trend rates going forward.

Plan Assets:

The underlying basis of the investment strategy of our U.S. postretirement plans is to ensure that funds are available to meet the plans’ benefit obligations when they are due by investing plan assets in a high-quality, diversified manner in order to maintain the security of the funds. The investment strategy expects equity investments to yield a higher return over the long term than fixed-income securities, while fixed-income securities are expected to provide certain matching characteristics to the plans’ benefit payment cash flow requirements.

Our weighted average asset allocations were:

			December 27, 2025						December 28, 2024
Fixed-income securities			74		%				64		%
Equity securities			17		%				29		%
Cash and cash equivalents			9		%				7		%

Our postretirement benefit plan investment strategy is subject to local regulations and the asset/liability profiles of the plans in each individual country. Our investment strategy is designed to align our postretirement benefit plan assets with our postretirement benefit obligation to reduce volatility. In aggregate, our long-term asset allocation targets are broadly characterized as a mix of approximately 76% in fixed-income securities and approximately 24% in return-seeking assets, primarily equity securities. Our weighted average postretirement asset allocations deviate from our target allocations due to a rebalancing of our plan asset portfolio, which was in process as of December 27, 2025. We expect our postretirement asset allocations to more closely align to our postretirement investment target once those activities are completed.

The fair value of postretirement benefit plan assets at December 27, 2025 was determined using the following fair value measurements (in millions):

Asset Category			Total Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Government bonds			$	86					$	79					$	7					$	—
Corporate bonds and other fixed-income securities			359						—						359						—
Total fixed-income securities			445						79						366						—
Equity securities			53						53						—						—
Fair value excluding investments measured at net asset value			498						$	132					$	366					$	—
Investments measured at net asset value			105
Total plan assets at fair value			$	603

The fair value of postretirement benefit plan assets at December 28, 2024 was determined using the following fair value measurements (in millions):

Asset Category			Total Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Government bonds			$	83					$	76					$	7					$	—
Corporate bonds and other fixed-income securities			421						—						421						—
Total fixed-income securities			504						76						428						—
Equity securities			151						151						—						—
Fair value excluding investments measured at net asset value			655						$	227					$	428					$	—
Investments measured at net asset value			138
Total plan assets at fair value			$	793

The following section describes the valuation methodologies used to measure the fair value of postretirement benefit plan assets, including an indication of the level in the fair value hierarchy in which each type of asset is generally classified.

Government Bonds. These securities consist of direct investments in publicly traded U.S. fixed interest obligations (principally debentures) and non-U.S. government bonds. U.S. government bonds are valued using quoted prices in active markets and are included in Level 1. Non-U.S. government bonds are generally valued using observable inputs and are included in Level 2.

Corporate Bonds and Other Fixed-Income Securities. These securities consist of publicly traded U.S. and non-U.S. fixed interest obligations (principally corporate bonds and tax-exempt municipal bonds). Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. As such, these securities are included in Level 2.

Equity Securities. These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1.

Cash and Cash Equivalents. This consists of direct cash holdings and institutional short-term investment vehicles. Direct cash holdings are valued based on cost, which approximates fair value and are classified as Level 1. Certain institutional short-term investment vehicles are valued daily and are classified as Level 1. Other cash equivalents that are not traded on an active exchange, such as bank deposits, are classified as Level 2.

Investments Measured at Net Asset Value. This category consists of pooled funds and short-term investments.

• Pooled funds. The fair values of participation units held in collective trusts are based on their net asset values, as reported by the managers of the collective trusts and as supported by the unit prices of actual purchase and sale transactions occurring as of or close to the financial statement date. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. Investments in the collective trusts can be redeemed on each business day based upon the applicable net asset value per unit.

The mutual fund investments are not traded on an exchange. The fair values of the mutual fund investments that are not traded on an exchange are based on their net asset values, as reported by the managers and as supported by the unit prices of actual purchase and sale transactions occurring as of or close to the financial statement date. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy.

• Short-term investments. Short-term investments, including cash and cash equivalents, largely consist of a money market fund, the fair value of which is based on the net asset value reported by the manager of the fund and supported by the unit prices of actual purchase and sale transactions. The fair value of these investments measured at net asset value is excluded from the fair value hierarchy. The money market fund is designed to provide safety of principal, daily liquidity, and a competitive yield by investing in high quality money market instruments. The investment objective of the money market fund is to provide the highest possible level of current income while still maintaining liquidity and preserving capital.

Employer Contributions:

We contributed $10 million in 2025 and $11 million in 2024 and 2023 to our postretirement benefit plans. We estimate that 2026 postretirement benefit plan contributions will be approximately $11 million. Estimated future contributions take into consideration current economic conditions, which at this time are expected to have minimal impact on expected contributions for 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.

During the fourth quarter of 2025, we amended the U.S. postretirement medical plan to establish a sub-trust to permit the payment of certain benefits for active non-union employees using $200 million of the retiree plan surplus, which represents a portion of the retiree plan’s total surplus. This amount was converted to cash and treated as a negative contribution which is shown as a cash inflow within operating activities on the consolidated statement of cash flows. As a result of its designation for this purpose, the transferred amount is no longer considered an asset of the retiree plan and is recognized as restricted cash and recorded in other current assets and other non-current assets within the consolidated balance sheets.

In 2024, we amended the U.S. postretirement medical plan to establish a sub-trust to permit the payment of certain benefits for active union employees using $150 million of the retiree plan surplus, which represents a portion of the retiree plan’s total surplus. This amount was converted to cash and treated as a negative contribution which is shown as a cash inflow within operating activities on the consolidated statement of cash flows. As a result of its designation for this purpose, the transferred amount is no longer considered an asset of the retiree plan and is recognized as restricted cash and recorded in other current assets and other non-current assets within the consolidated balance sheets.

Future Benefit Payments:

Our estimated future benefit payments for our postretirement plans at December 27, 2025 were (in millions):

2026			$	69
2027			64
2028			61
2029			57
2030			54
2031-2035			228

Other Plans

We sponsor and contribute to employee savings plans that cover eligible salaried, non-union, and union employees. Our contributions and costs are determined by the matching of employee contributions, as defined by the plans. Amounts charged to expense for defined contribution plans totaled $110 million in 2025, $109 million in 2024, and $103 million in 2023.

Accumulated Other Comprehensive Income/(Losses)

Our accumulated other comprehensive income/(losses) pension and postretirement benefit plans balances, before tax, consisted of the following (in millions):

			Pension Benefits												Postretirement Benefits												Total
			December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024						December 27, 2025						December 28, 2024
Net actuarial gain/(loss)			$	(501)					$	(414)					$	481					$	502					$	(20)					$	88
Prior service credit/(cost)			(20)						(19)						(29)						(19)						(49)						(38)
			$	(521)					$	(433)					$	452					$	483					$	(69)					$	50

The net postemployment benefits recognized in other comprehensive income/(loss), consisted of the following (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Net postemployment benefit gains/(losses) arising during the period:
Net actuarial gains/(losses) arising during the period - Pension Benefits			$	(112)					$	(13)					$	(145)
Net actuarial gains/(losses) arising during the period - Postretirement Benefits			5						58						67
Prior service credits/(costs) arising during the period - Pension Benefits			(4)						(9)						—
			(111)						36						(78)
Tax benefit/(expense)			27						(8)						8
			$	(84)					$	28					$	(70)
Reclassification of net postemployment benefit losses/(gains) to net income/(loss):
Amortization of unrecognized losses/(gains) - Pension Benefits			$	14					$	13					$	13
Amortization of unrecognized losses/(gains) - Postretirement Benefits			(26)						(22)						(17)
Amortization of prior service costs/(credits) - Pension Benefits			3						2						1
Amortization of prior service costs/(credits) - Postretirement Benefits			(10)						(12)						(15)
Net settlement and curtailment losses/(gains) - Pension Benefits			11						—						146
			(8)						(19)						128
Tax (benefit)/expense			2						5						(13)
			$	(6)					$	(14)					$	115

Note 13. Financial Instruments

We maintain a policy of requiring that all significant, non-exchange traded derivative contracts be governed by an International Swaps and Derivatives Association master agreement, and these master agreements and their schedules contain certain obligations regarding the delivery of certain financial information upon demand.

Derivative Volume:

The notional values of our outstanding derivative instruments were (in millions):

			Notional Amount
			December 27, 2025						December 28, 2024
Commodity contracts			$	976					$	1,152
Foreign exchange contracts			4,229						3,067
Cross-currency contracts			3,083						7,449

Fair Value of Derivative Instruments:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the consolidated balance sheets were (in millions):

			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 derivative liabilities was recorded in other current liabilities ($70 million) and other non-current liabilities ($3 million).

			December 28, 2024
			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)			$	—					$	—					$	45					$	9					$	45					$	9
Cross-currency contracts(b)			—						—						137						172						137						172
Derivatives not designated as hedging instruments:
Commodity contracts(c)			24						37						9						19						33						56
Foreign exchange contracts(a)			—						—						33						8						33						8
Total fair value			$	24					$	37					$	224					$	208					$	248					$	245

(a) At December 28, 2024, the fair value of our derivative assets was recorded in other current assets ($71 million) and other non-current assets ($7 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($16 million) and other non-current liabilities ($1 million).

(b) At December 28, 2024, the fair value of our derivative assets was recorded in other current assets ($69 million) and other non-current assets ($68 million), and the fair value of our derivative liabilities was recorded in other current liabilities ($34 million) and other non-current liabilities ($138 million).

(c) At December 28, 2024, the fair value of our derivative assets was recorded in other current assets and the fair value of derivative liabilities was recorded in other current liabilities ($55 million) and other non-current liabilities ($1 million).

Our derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. We elect to record the gross assets and liabilities of our derivative financial instruments on the consolidated balance sheets. If the derivative financial instruments had been netted on the consolidated balance sheets, the asset and liability positions each would have been reduced by $45 million at December 27, 2025 and $141 million at December 28, 2024. We had posted collateral related to commodity derivative margin requirements of $52 million at December 27, 2025 and $25 million at December 28, 2024, which were included in prepaid expenses on our consolidated balance sheets.

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 swaps, 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 December 27, 2025, we had the following items designated as net investment hedges:

• Non-derivative foreign currency denominated debt with principal amounts of €2.4 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 ($571 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 December 27, 2025, 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 December 27, 2025, 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 ($540 million) and the carrying value of the hedged item of $539 million is included in the long-term debt on the 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 items, 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 December 27, 2025 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, foreign exchange cash flow hedges, foreign exchange fair value 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 cross-currency cash flow hedges to be insignificant.

Concentration of Credit Risk:

Counterparties to our foreign exchange derivatives consist of major international financial institutions. We continually monitor our positions and the credit ratings of the counterparties involved and, by policy, limit the amount of our credit exposure to any one party. While we may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated. We closely monitor the credit risk associated with our counterparties and customers and to date have not experienced material losses.

Economic Hedging:

We enter into certain derivative contracts not designated as hedging instruments in accordance with our risk management strategy, which have an economic impact of largely mitigating commodity price risk and foreign currency exposures. Gains and losses are recorded in net income/(loss) as a component of cost of products sold for our commodity contracts and other expense/(income) for our cross currency and foreign exchange contracts.

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)
						December 27, 2025						December 28, 2024						December 30, 2023
Cash flow hedges:
Foreign exchange contracts						$	1					$	(1)					$	—					Net sales
Foreign exchange contracts						(42)						67						(12)						Cost of products sold
Foreign exchange contracts (excluded component)						(1)						(8)						(6)						Cost of products sold
Foreign exchange contracts						(2)						1						(1)						SG&A
Foreign exchange contracts						—						45						(22)						Other expense/(income)
Foreign exchange contracts (excluded component)						—						8						2						Other expense/(income)
Cross-currency contracts						197						(80)						83						Other expense/(income)
Cross-currency contracts (excluded component)						—						—						24						Other expense/(income)
Cross-currency contracts						(12)						(29)						(26)						Interest expense
Interest rate contracts						—						—						(3)						Interest expense
Net investment hedges:
Foreign exchange contracts						(11)						4						(1)						Other expense/(income)
Foreign exchange contracts (excluded component)						—						1						1						Interest expense
Cross-currency contracts						(244)						121						(117)						Other expense/(income)
Cross-currency contracts (excluded component)						37						49						35						Interest expense
Fair value hedges:
Foreign exchange contracts (excluded component)						(2)						—						—						Other expense/(income)
Cross-currency contracts (excluded component)						37						(37)						—						Other expense/(income)
Total gains/(losses) recognized in statements of comprehensive income						$	(42)					$	141					$	(43)

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):

									December 27, 2025																								December 28, 2024
									Cost of products sold												Interest expense						Other expense/ (income)												Cost of products sold												Interest expense						Other expense/ (income)
Total amounts presented in the consolidated statements of income in which the following effects were recorded									$	16,633											$	947					$	(171)											$	16,878											$	912					$	(85)
Gains/(losses) related to derivatives designated as hedging instruments:
Cash flow hedges(a):
Foreign exchange contracts									$	16											$	—					$	—											$	13											$	—					$	45
Foreign exchange contracts (excluded component)									(2)												—						—												(6)												—						9
Cross-currency contracts									—												(12)						230												—												(30)						(111)
Net investment hedges(a):
Foreign exchange contracts (excluded component)									—												1						—												—												1						—
Cross-currency contracts (excluded component)									—												38						—												—												49						—
Fair Value hedges(b):
Foreign exchange contracts									—												—						20												—												—						—
Cross-currency contracts									—												—						(60)												—												—						(1)
Cross-currency contracts (excluded component)(a)									—												—						10												—												—						4
Hedged items									—												—						39												—												—						1
Gains/(losses) related to derivatives not designated as hedging instruments:
Commodity contracts									(79)												—						—												(20)												—						—
Foreign exchange contracts									—												—						3												—												—						38
Interest rate contracts(c)									—												—						—												—												—						(3)
Cross-currency contracts									—												—						9												—												—						(27)
Total gains/(losses) recognized in statements of income									$	(65)											$	27					$	251											$	(13)											$	20					$	(45)

(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.

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

									December 30, 2023
									Cost of products sold												Interest expense						Other expense/ (income)
Total amounts presented in the consolidated statements of income in which the following effects were recorded									$	17,714											$	912					$	27
Gains/(losses) related to derivatives designated as hedging instruments:
Cash flow hedges(a):
Foreign exchange contracts									$	38											$	—					$	(20)
Foreign exchange contracts (excluded component)									(10)												—						—
Cross-currency contracts									—												(27)						63
Cross-currency contracts (excluded component)									—												—						25
Net investment hedges(a):
Foreign exchange contracts (excluded component)									—												1						—
Cross-currency contracts (excluded component)									—												34						—
Gains/(losses) related to derivatives not designated as hedging instruments:
Commodity contracts									(110)												—						—
Foreign exchange contracts									—												—						(12)
Cross-currency contracts									—												—						3
Total gains/(losses) recognized in statements of income									$	(82)											$	8					$	59

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

Non-Derivative Impact on Statements of Comprehensive Income:

Related to our non-derivative foreign currency denominated debt instruments designated as net investment hedges, we recognized pre-tax losses of $157 million in 2025, pre-tax gains of $37 million in 2024, and pre-tax losses of $39 million in 2023. 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):

			December 27, 2025
			Amortized Cost Basis						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
Debt securities:
Corporate bonds			$	456					$	—					$	—					$	456
Commercial paper			752						—						—						752
U.S. treasury and agency			72						—						—						72
Money market funds			1						—						—						1
Total			$	1,281					$	—					$	—					$	1,281

(a) Amortized cost basis excludes approximately $4 million of accrued interest.

We purchased $2.5 billion in corporate bonds, commercial paper, and U.S. treasury and agency securities and received $1.3 billion in proceeds from maturity of corporate bonds, commercial paper, and U.S. treasury and agency securities for the year ended December 27, 2025. During the same period, no investments in corporate bonds, commercial paper, or U.S. treasury and agency securities were sold prior to maturity. We recognized no direct write-offs or allowances for credit losses in earnings for the year ended December 27, 2025. Cash flows related to the purchases and sale/maturity of these marketable securities are classified in the 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 consolidated balance sheet (in millions):

			December 27, 2025
Cash and cash equivalents			$	221
Marketable securities			1,060
Total			$	1,281

The contractual maturities of these available-for-sale debt securities are all within one-year as of December 27, 2025. We had no available-for-sale debt securities as of December 28, 2024.

Note 14. 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 at December 31, 2022			$	(2,845)					$	(30)					$	65					$	—											$	(2,810)
Foreign currency translation adjustments			307						—						—						—												307
Net deferred gains/(losses) on net investment hedges			(119)						—						—						—												(119)
Amounts excluded from the effectiveness assessment of net investment hedges			28						—						—						—												28
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)			(27)						—						—						—												(27)
Net deferred gains/(losses) on cash flow hedges			—						—						3						—												3
Amounts excluded from the effectiveness assessment of cash flow hedges			—						—						19						—												19
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)			—						—						(50)						—												(50)
Net actuarial gains/(losses) arising during the period			—						(70)						—						—												(70)
Net postemployment benefit losses/(gains) reclassified to net income/(loss)			—						115						—						—												115
Other activity			22						—						(22)						—												—
Total other comprehensive income/(loss)			211						45						(50)						—												206
Balance at December 30, 2023			(2,634)						15						15						—												(2,604)
Foreign currency translation adjustments			(486)						—						—						—												(486)
Net deferred gains/(losses) on net investment hedges			121						—						—						—												121
Amounts excluded from the effectiveness assessment of net investment hedges			38						—						—						—												38
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)			(38)						—						—						—												(38)
Net deferred gains/(losses) on cash flow hedges			—						—						21						—												21
Amounts excluded from the effectiveness assessment of cash flow hedges			—						—						6						—												6
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)			—						—						39						—												39
Amounts excluded from the effectiveness assessment of fair value hedges			—						—						—						(23)												(23)
Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss)			—						—						—						(3)												(3)
Net actuarial gains/(losses) arising during the period			—						35						—						—												35
Prior service credits/(costs) arising during the period			—						(7)						—						—												(7)
Net postemployment benefit losses/(gains) reclassified to net income/(loss)			—						(14)						—						—												(14)
Total other comprehensive income/(loss)			(365)						14						66						(26)												(311)
Balance at December 28, 2024			(2,999)						29						81						(26)												(2,915)

Foreign currency translation adjustments			998						—						—						—												998
Net deferred gains/(losses) on net investment hedges			(313)						—						—						—												(313)
Amounts excluded from the effectiveness assessment of net investment hedges			28						—						—						—												28
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)			(30)						—						—						—												(30)
Net deferred gains/(losses) on cash flow hedges			—						—						106						—												106
Amounts excluded from the effectiveness assessment of cash flow hedges			—						—						(1)						—												(1)
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)			—						—						(173)						—												(173)
Amounts excluded from the effectiveness assessment of fair value hedges			—						—						—						26												26
Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss)			—						—						—						(6)												(6)
Net actuarial gains/(losses) arising during the period			—						(81)						—						—												(81)
Prior service credits/(costs) arising during the period			—						(3)						—						—												(3)
Net postemployment benefit losses/(gains) reclassified to net income/(loss)			—						(6)						—						—												(6)
Other activity			15						—						(15)						—												—
Total other comprehensive income/(loss)			698						(90)						(83)						20												545
Balance at December 27, 2025			$	(2,301)					$	(61)					$	(2)					$	(6)											$	(2,370)

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):

			December 27, 2025																		December 28, 2024																		December 30, 2023
			Before Tax Amount						Tax						Net of Tax Amount						Before Tax Amount						Tax						Net of Tax Amount						Before Tax Amount						Tax						Net of Tax Amount
Foreign currency translation adjustments			$	998					$	—					$	998					$	(486)					$	—					$	(486)					$	307					$	—					$	307
Net deferred gains/(losses) on net investment hedges			(412)						99						(313)						162						(41)						121						(157)						38						(119)
Amounts excluded from the effectiveness assessment of net investment hedges			37						(9)						28						50						(12)						38						36						(8)						28
Net deferred losses/(gains) on net investment hedges reclassified to net income/(loss)			(39)						9						(30)						(50)						12						(38)						(35)						8						(27)
Net deferred gains/(losses) on cash flow hedges			142						(36)						106						3						18						21						19						(16)						3
Amounts excluded from the effectiveness assessment of cash flow hedges			(1)						—						(1)						—						6						6						20						(1)						19
Net deferred losses/(gains) on cash flow hedges reclassified to net income/(loss)			(232)						59						(173)						83						(44)						39						(69)						19						(50)
Amounts excluded from the effectiveness assessment of fair value hedges			35						(9)						26						(37)						14						(23)						—						—						—
Net deferred losses/(gains) on fair value hedges reclassified to net income/(loss)			(10)						4						(6)						(4)						1						(3)						—						—						—
Net actuarial gains/(losses) arising during the period			(107)						26						(81)						45						(10)						35						(78)						8						(70)
Prior service credits/(costs) arising during the period			(4)						1						(3)						(9)						2						(7)						—						—						—
Net postemployment benefit losses/(gains) reclassified to net income/(loss)			(8)						2						(6)						(19)						5						(14)						128						(13)						115

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
						December 27, 2025						December 28, 2024						December 30, 2023
Losses/(gains) on net investment hedges:
Foreign exchange contracts(a)						$	(1)					$	(1)					$	(1)					Interest expense
Cross-currency contracts(a)						(38)						(49)						(34)						Interest expense
Losses/(gains) on cash flow hedges:
Foreign exchange contracts(a) (b)						(14)						(7)						(28)						Cost of products sold
Foreign exchange contracts(a) (b)						—						(54)						20						Other expense/(income)
Cross-currency contracts(a) (b)						(230)						111						(88)						Other expense/(income)
Cross-currency contracts(a) (b)						12						30						27						Interest expense
Interest rate contracts(c)						—						3						—						Other expense/(income
Losses/(gains) on fair value hedges:
Cross-currency contracts(a)						(10)						(4)						—						Other expense/(income
Losses/(gains) on hedges before income taxes						(281)						29						(104)
Losses/(gains) on hedges, income taxes						72						(31)						27
Losses/(gains) on hedges						$	(209)					$	(2)					$	(77)
Losses/(gains) on postemployment benefits:
Amortization of unrecognized losses/(gains)(d)						$	(12)					$	(9)					$	(4)
Amortization of prior service costs/(credits)(d)						(7)						(10)						(14)
Settlement and curtailment losses/(gains)(d)						11						—						146
Losses/(gains) on postemployment benefits before income taxes						(8)						(19)						128
Losses/(gains) on postemployment benefits, income taxes						2						5						(13)
Losses/(gains) on postemployment benefits						$	(6)					$	(14)					$	115

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

(d) These components are included in the computation of net periodic postemployment benefit costs. See Note 12, 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 15. Financing Arrangements

Transfers of Financial Assets:

Prior to 2025, we had a nonrecourse accounts receivable factoring program whereby certain eligible receivables are sold to third-party financial institutions in exchange for cash. Under the terms of the arrangement, we acted as the collecting agent on behalf of the financial institutions to collect amounts due from customers for the receivables sold. We accounted for the transfer of receivables as a true sale at the point control is transferred through derecognition of the receivable on our consolidated balance sheet. As of December 28, 2024, the Company elected not to renew this accounts receivable factoring program. There were no outstanding obligations at the time the program was terminated. The accounts receivable factoring program was not utilized in 2024 as there were no receivables sold under the program during 2024. Receivables sold under this accounts receivable factoring program were approximately $863 million during 2023, with no amounts outstanding as of December 30, 2023. The incremental costs of factoring receivables under this arrangement were insignificant for the year ended December 30, 2023. The proceeds from the sales of receivables are included in cash from operating activities in the consolidated statement of cash flows.

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 confirmed outstanding amounts under these programs were $755 million at December 27, 2025 and $745 million at December 28, 2024. The amounts were included in trade payables on our consolidated balance sheets. During 2025, we added $2,671 million of obligations to these programs and settled $2,661 million of obligations.

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

Ending Balance at December 28, 2024			$	745
Obligations confirmed			2,671
Confirmed obligations settled			(2,661)
Ending Balance at December 27, 2025			$	755

Note 16. Commitments and Contingencies

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 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. On December 2, 2025, the plaintiffs filed a motion for leave to file a verified consolidated second 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. In March 2025, SEMAD issued a first instance administrative decision maintaining the initial infraction notice, and in September 2025, SEMAD issued a second instance administrative decision again maintaining the initial infraction notice. In a separate action brought against the Company by the local Public Prosecutor in September 2025 relating to the same alleged pollution, the court of first instance imposed a penalty against the Company in November 2025. Given that there are several available levels of appeal from both SEMAD’s administrative decision and the decision of the court in the Public Prosecutor’ action, 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.

Other Commitments and Contingencies

Purchase Obligations:

We have purchase obligations for materials, supplies, property, plant and equipment, and co-packing, storage, and distribution services based on projected needs to be utilized in the normal course of business. Other purchase obligations include commitments for marketing, advertising, capital expenditures, information technology, and professional services.

As of December 27, 2025, our take-or-pay purchase obligations were as follows (in millions):

2026			$	587
2027			480
2028			363
2029			297
2030			110
Thereafter			197
Total			$	2,034

Note 17. 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. Cash payments related to debt extinguishment are classified as cash outflows from financing activities on the consolidated statements of cash flows. Any gains or losses on extinguishment of debt are recognized in interest expense on the consolidated statements of income.

Borrowing Arrangements:

Together with Kraft Heinz Foods Company (“KHFC”), our 100% owned operating subsidiary, we have a credit agreement (the “Credit Agreement”), which provides for a five-year senior unsecured revolving credit facility in an aggregate amount of $4.0 billion (the “Senior Credit Facility”). On July 8, 2025, we entered into an amendment to this agreement to extend the maturity date from July 8, 2029 to July 8, 2030. Further, the amendment modified certain financial covenants, which changed our required minimum shareholders’ equity balance (excluding accumulated other comprehensive income/(losses) from $35 billion to $25 billion, and added an allowable add-back to the minimum shareholders’ equity balance of up to $2 billion annually, commensurate with goodwill and intangible asset impairments recorded during the period.

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

Borrowings under the Senior Credit Facility will bear interest at the rates specified in the Credit Agreement, which vary based on the type of borrowing and certain other customary conditions.

The 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. The obligations under the Credit Agreement are guaranteed by KHFC and The Kraft Heinz Company in the case of indebtedness and other liabilities of any subsidiary borrower.

No amounts were drawn on our Senior Credit Facility at December 27, 2025 or December 28, 2024. No amounts were drawn on our Senior Credit Facility during the years ended December 27, 2025, December 28, 2024 or December 30, 2023.

From time to time, we obtain funding through our commercial paper programs. We had no commercial paper outstanding at December 27, 2025, December 28, 2024 and December 30, 2023. We had no commercial paper outstanding during the years ended December 27, 2025 and December 28, 2024, and the maximum amount of commercial paper outstanding was $150 million during the year ended December 30, 2023.

Long-Term Debt:

The following table summarizes our long-term debt obligations.

						Priority (a)						Maturity Dates**(b)**						Interest Rates**(b)**						Carrying Values
																								December 27, 2025						December 28, 2024
																								(in millions)
U.S. dollar notes(c)						Senior Notes						2026–2050						3.000%–7.125%						$	17,517					$	16,535
Euro notes(c)						Senior Notes						2028–2033						2.250%–3.500%						2,809						2,494
British pound sterling notes:
2030 Notes(d)						Senior Notes						February 18, 2030						6.250%						171						161
Other British pound sterling notes(c)						Senior Notes						July 1, 2027						4.125%						539						502
Other debt						Various						2026–2035						0.810%–11.600%						23						26
Finance lease obligations																								160						151
Total long-term debt																								21,219						19,869
Current portion of long-term debt																								1,908						654
Long-term debt, excluding current portion																								$	19,311					$	19,215

(a) Priority of debt indicates the order in which debt would be paid if all debt obligations were due on the same day. Senior secured debt takes priority over unsecured debt. Senior debt has greater seniority than subordinated debt.

(b) Maturity dates and interest rates presented are for the outstanding long-term debt obligations at December 27, 2025.

(c) Kraft Heinz fully and unconditionally guarantees these notes, which were issued by KHFC.

(d) The 6.250% Pound Sterling Senior Notes due February 18, 2030 (the “2030 Notes”) were issued by H.J. Heinz Finance UK Plc. Kraft Heinz and KHFC fully and unconditionally guarantee the 2030 Notes. The 2030 Notes rank pari passu in right of payment with all of our existing and future senior obligations. Kraft Heinz became guarantor of the 2030 Notes in connection with the 2015 Merger. The 2030 Notes were previously only guaranteed by KHFC.

Our long-term debt contains customary representations, covenants, and events of default. We were in compliance with all financial covenants as of December 27, 2025.

At December 27, 2025, aggregate principal maturities of our long-term debt excluding finance leases were (in millions):

2026			$	1,879
2027			1,893
2028			1,679
2029			1,009
2030			915
Thereafter			13,568

Debt Issuances:

2025 Debt Issuances

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, and interest on a senior unsecured basis.

2024 Debt Issuances

In the first quarter of 2024, KHFC issued 550 million euro aggregate principal amount of 3.500% senior notes due March 2029 (the “2024 Notes”). The 2024 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal, premium, and interest on a senior unsecured basis.

2023 Debt Issuances

In May 2023, KHFC issued 600 million euro aggregate principal amount of floating rate senior notes due May 2025 (the “2023 Notes”). The 2023 Notes are fully and unconditionally guaranteed by The Kraft Heinz Company as to payment of principal and interest on a senior unsecured basis.

Debt Issuance Costs:

Debt issuance costs are reflected as a direct deduction of the current portion of long-term debt and long-term debt balances on our consolidated balance sheets. We incurred $15 million of debt issuance costs in 2025 and insignificant amount of debt issuance costs in 2024, and 2023. Unamortized debt issuance costs were $78 million at December 27, 2025 and $75 million at December 28, 2024. Amortization of debt issuance costs was $12 million in 2025, $12 million in 2024, and $11 million in 2023, and was reflected within interest expense on our consolidated statements of income.

Debt Premium:

Unamortized debt premiums are presented on our consolidated balance sheets as a direct addition to the carrying amount of debt. Unamortized debt premium, net, was $194 million at December 27, 2025 and $217 million at December 28, 2024. Amortization of our debt premium, net, was $15 million in 2025, and $16 million in 2024 and 2023, and was reflected within interest expense on our consolidated statements of income.

Debt Repayments:

In May 2025, we repaid 600 million euro aggregate principal amount of senior notes that matured in the period.

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

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

Fair Value of Debt:

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. At December 28, 2024, the aggregate fair value of our total debt was $18.7 billion as compared with a carrying value of $19.9 billion. Our short-term debt had a carrying value that approximated its fair value at December 27, 2025 and December 28, 2024. 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.

Note 18. Leases

We have operating and finance leases, primarily for warehouse, production, and office facilities and equipment. Our lease contracts have remaining contractual lease terms of up to 16 years, some of which include options to extend the term by up to 15 years. We include renewal options that are reasonably certain to be exercised as part of the lease term. Additionally, some lease contracts include termination options. We do not expect to exercise the majority of our termination options and generally exclude such options when determining the term of our leases. See Note 2, Significant Accounting Policies, for our lease accounting policy.

The components of our lease costs were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Operating lease costs			$	144					$	141					$	152
Finance lease costs:
Amortization of right-of-use assets			27						27						28
Interest on lease liabilities			7						7						5
Short-term lease costs			6						9						12
Variable lease costs			388						334						659
Sublease income			(8)						(9)						(10)
Total lease costs			$	564					$	509					$	846

Our variable lease costs primarily consist of inventory related costs, such as materials, labor, and overhead components in our manufacturing and distribution arrangements that also contain a fixed component related to an embedded lease. These variable lease costs are determined based on usage or output or may vary for other reasons such as changes in material prices, taxes, or insurance. Certain of our variable lease costs are based on fluctuating indices or rates. These leases are included in our ROU assets and lease liabilities based on the index or rate at the lease commencement date. The future variability in these indices and rates is unknown; therefore, it is excluded from our future minimum lease payments and is not a component of our ROU assets or lease liabilities.

We had no losses/(gains) on sale and leaseback transactions in 2025, 2024, and 2023.

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

			December 27, 2025												December 28, 2024
			Operating Leases						Finance Leases						Operating Leases						Finance Leases
Right-of-use assets			$	520					$	158					$	539					$	148
Lease liabilities (current)			126						30						117						25
Lease liabilities (non-current)			427						130						464						126
Weighted average remaining lease term			6 years						8 years						7 years						9 years
Weighted average discount rate			3.9		%				4.3		%				3.9		%				4.6		%

Operating lease ROU assets are included in other non-current assets and finance lease ROU assets are included in property, plant and equipment, net, on our consolidated balance sheets. The current portion of operating lease liabilities is included in other current liabilities, and the current portion of finance lease liabilities is included in the current portion of long-term debt on our consolidated balance sheets. The non-current portion of operating lease liabilities is included in other non-current liabilities, and the non-current portion of finance lease liabilities is included in long-term debt on our consolidated balance sheets.

Cash flows arising from lease transactions were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash inflows/(outflows) from operating leases			$	(147)					$	(144)					$	(156)
Operating cash inflows/(outflows) from finance leases			(7)						(7)						(5)
Financing cash inflows/(outflows) from finance leases			(30)						(32)						(26)
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases			79						64						44
Finance leases			41						48						25

Future minimum lease payments for leases in effect at December 27, 2025 were (in millions):

			Operating Leases						Finance Leases
2026			$	145					$	38
2027			114						31
2028			94						39
2029			72						18
2030			55						13
Thereafter			149						49
Total future undiscounted lease payments			629						188
Less imputed interest			(76)						(28)
Total lease liability			$	553					$	160

At December 27, 2025, our operating and finance leases that had not yet commenced were approximately $210 million. This balance is primarily composed of a non-cancellable synthetic lease with a future minimum lease commitment of approximately $176 million. See below for discussion of our synthetic lease arrangement.

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 as disclosed in Note 17, Debt.

Note 19. Capital Stock

Common Stock

Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of up to 5.0 billion shares of common stock.

Shares of common stock issued, in treasury, and outstanding were (in millions of shares):

			Shares Issued						Treasury Shares						Shares Outstanding
Balance at December 31, 2022			1,243						(18)						1,225
Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other			6						(13)						(7)
Balance at December 30, 2023			1,249						(31)						1,218
Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other			5						(28)						(23)
Balance at December 28, 2024			1,254						(59)						1,195
Exercise of stock options, issuance of other stock awards, repurchase of common stock, and other			3						(14)						(11)
Balance at December 27, 2025			1,257						(73)						1,184

Share Repurchase Program

On November 27, 2023, we announced that the Board 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 Exchange Act, privately negotiated transactions, transactions structured through investment banking institutions, or other means. As of December 27, 2025, we had remaining authorization under the share repurchase program of approximately $1.5 billion. The share repurchase program is in addition to our share repurchases to offset the dilutive effect of equity-based compensation.

Note 20. Earnings Per Share

Our earnings per common share (“EPS”) were:

			December 27, 2025						December 28, 2024						December 30, 2023
			(in millions, except per share data)
Basic Earnings Per Common Share:
Net income/(loss) attributable to common shareholders			$	(5,846)					$	2,744					$	2,855
Weighted average shares of common stock outstanding			1,187						1,210						1,227
Net earnings/(loss)			$	(4.93)					$	2.27					$	2.33
Diluted Earnings Per Common Share:
Net income/(loss) attributable to common shareholders			$	(5,846)					$	2,744					$	2,855
Weighted average shares of common stock outstanding			1,187						1,210						1,227
Effect of dilutive equity awards			—						5						8
Weighted average shares of common stock outstanding, including dilutive effect			1,187						1,215						1,235
Net earnings/(loss)			$	(4.93)					$	2.26					$	2.31

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 14 million in 2025, 6 million in 2024, and 7 million in 2023.

Note 21. Segment Reporting

We manage our operating results through four operating segments: North America, Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”). We have two reportable segments defined by geographic region: North America and International Developed Markets. Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

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. Carlos Abrams-Rivera served as our Chief Executive Officer during our fiscal year 2025. Subsequent to our fiscal year ended December 27, 2025, the Company appointed Steve Cahillane as Chief Executive Officer effective January 1, 2026.

Emerging Markets represents the aggregation of our WEEM and AEM operating segments. Adjusted Operating Income for WEEM and AEM is the measure reported to our chief operating decision maker for purposes of making decisions about allocating resources to these operating segments and assessing their performance.

Net sales by segment were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Net sales:
North America			$	18,586					$	19,543					$	20,126
International Developed Markets			3,539						3,535						3,623
Total segment net sales			22,125						23,078						23,749
Emerging Markets			2,817						2,768						2,891
Total net sales			$	24,942					$	25,846					$	26,640

Segment Adjusted Operating Income was (in millions):

			December 27, 2025
			North America						International Developed Markets						Total
Net Sales			$	18,586					$	3,539
Adjusted Cost of Products Sold(a)			12,076						2,497
Other segment items(b)			2,121						499
Segment Adjusted Operating Income			$	4,389					$	543					$	4,932
Emerging Markets															341
General corporate expenses															(528)
Restructuring activities															(13)
Unrealized gains/(losses) on commodity hedges															(35)
Impairment losses															(9,306)
Separation costs															(60)
Operating income/(loss)															$	(4,669)
Interest expense															947
Other expense/(income)															(171)
Income/(loss) before income taxes															$	(5,445)

(a) Adjusted Cost of Products Sold is defined as cost of products sold 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.

(b) Other segment items for North America and International Developed Markets includes SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.

			December 28, 2024
			North America						International Developed Markets						Total
Net Sales			$	19,543					$	3,535
Adjusted Cost of Products Sold(a)			12,356						2,482
Other segment items(b)			2,076						516
Segment Adjusted Operating Income			$	5,111					$	537					$	5,648
Emerging Markets															321
General corporate expenses															(609)
Restructuring activities															(27)
Unrealized gains/(losses) on commodity hedges															19
Impairment losses															(3,669)
Operating income/(loss)															$	1,683
Interest expense															912
Other expense/(income)															(85)
Income/(loss) before income taxes															$	856

(a) Adjusted Cost of Products Sold is defined as cost of products sold excluding, when they occur, the impacts of restructuring activities, deal costs, 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.

(b) Other segment items for North America and International Developed Markets includes SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.

			December 30, 2023
			North America						International Developed Markets						Total
Net Sales			$	20,126					$	3,623
Adjusted Cost of Products Sold(a)			12,948						2,580
Other segment items(b)			2,128						521
Segment Adjusted Operating Income			$	5,050					$	522					$	5,572
Emerging Markets															376
General corporate expenses															(651)
Restructuring activities															(60)
Unrealized gains/(losses) on commodity hedges															(1)
Impairment losses															(662)
Certain non-ordinary course legal and regulatory matters															(2)
Operating income/(loss)															$	4,572
Interest expense															912
Other expense/(income)															27
Income/(loss) before income taxes															$	3,633

(a) Adjusted Cost of Products Sold is defined as cost of products sold 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.

(b) Other segment items for North America and International Developed Markets includes SG&A, primarily for marketing and advertising expenses, employee compensation-related expenses, amortization of definite-lived intangible assets, and research and development costs.

Total depreciation and amortization expense by segment was (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Depreciation and amortization expense:
North America			$	638					$	614					$	561
International Developed Markets			150						156						157
Total segment depreciation and amortization expense			788						770						718
Emerging Markets			112						106						157
General corporate			68						72						86
Total depreciation and amortization expense			$	968					$	948					$	961

Total capital expenditures by segment were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Capital expenditures:
North America			$	497					$	643					$	604
International Developed Markets			112						154						178
Total segment capital expenditures			609						797						782
Emerging Markets			105						115						163
General corporate			87						112						68
Total capital expenditures			$	801					$	1,024					$	1,013

We manage our product portfolio through eight consumer-driven product platforms: Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee, and Meats. A platform is a lens created for the portfolio based on a grouping of consumer needs. The platforms help us to manage and organize our business effectively by providing insight into our various product categories and brands.

Taste Elevation includes condiments, sauces, dressings, and spreads. Easy Ready Meals includes Kraft Mac & Cheese varieties, frozen potato products, and other frozen meals. Substantial Snacking includes Lunchables meal kits, frozen snacks, and pickles. Desserts includes dry packaged desserts, refrigerated ready to eat desserts, and other dessert toppings. Hydration includes ready to drink beverages, powdered beverages, and liquid concentrates. Cheese includes American sliced and recipe cheeses. Coffee includes mainstream coffee, coffee pods, and premium coffee. Meats include cold cuts, bacon, and hot dogs.

Each platform is assigned a role within our business to help inform our resource allocation and investment decisions, which are made at the operating segment level. These roles include: Accelerate, Protect, and Balance. Our Accelerate role contains platforms that are expected to have high growth potential, generate higher gross margins, and are in markets in which we have higher market share. Our Protect role contains platforms that are expected to have moderate growth potential, tend to generate higher gross margins, and are in markets in which we have higher market share. Our Balance role contains platforms that include commodity-heavy categories with relatively flat growth potential but help us to maintain our brand footprint.

We have reflected this change to our platforms in all historical periods presented.

Net sales by platform were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
ACCELERATE
Taste Elevation			$	11,281					$	11,371					$	11,573
Easy Ready Meals			4,068						4,310						4,437
Substantial Snacking			1,532						1,668						1,853
Total Accelerate			$	16,881					$	17,349					$	17,863
PROTECT
Desserts			$	1,123					$	1,152					$	1,153
Hydration			2,095						2,129						2,242
Total Protect			$	3,218					$	3,281					$	3,395
BALANCE
Cheese			$	1,657					$	1,746					$	1,786
Coffee			867						835						891
Meats			1,924						2,136						2,197
Other			395						499						508
Total Balance			$	4,843					$	5,216					$	5,382
Total net sales			$	24,942					$	25,846					$	26,640

The net sales by platform for the years ended December 28, 2024 and December 30, 2023 presented in the table above has been corrected to conform to our previously disclosed platform definitions. The update had no impact on net sales or on the consolidated financial statements and we do not believe they are material to the consolidated financial statements.

Concentration of Risk:

Our largest customer, Walmart Inc., represented approximately 21% of our net sales in 2025, 2024, and 2023. Both of our reportable segments have sales to Walmart Inc.

Geographic Financial Information:

We had significant sales in the United States, Canada, and the United Kingdom. Our net sales by geography were (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Net sales:
United States			$	16,784					$	17,768					$	18,377
Canada			1,802						1,775						1,749
United Kingdom			1,270						1,280						1,271
Other			5,086						5,023						5,243
Total net sales			$	24,942					$	25,846					$	26,640

We had significant long-lived assets in the United States. Long-lived assets are comprised of property, plant and equipment, net of related accumulated depreciation; operating lease right-of-use assets, net of related accumulated depreciation; and the non-current portion of deferred implementation costs for hosted cloud computing service arrangements. Our long-lived assets by geography were (in millions):

			December 27, 2025						December 28, 2024
Long-lived assets:
United States			$	5,462					$	5,415
Other			2,471						2,381
Total long-lived assets			$	7,933					$	7,796

At December 27, 2025, long-lived assets by geography excluded amounts classified as held for sale.

Note 22. Other Financial Data

Consolidated Statements of Income Information

Other expense/(income)

Other expense/(income) consists of the following (in millions):

			December 27, 2025						December 28, 2024						December 30, 2023
Amortization of postemployment benefit plans prior service costs/(credits)			$	(7)					$	(10)					$	(14)
Net pension and postretirement non-service cost/(benefit)(a)			(102)						(130)						67
Loss/(gain) on sale of business			42						81						(4)
Interest income			(122)						(69)						(40)
Foreign exchange losses/(gains)			234						(21)						73
Derivative losses/(gains)			(212)						45						(59)
Other miscellaneous expense/(income)			(4)						19						4
Other expense/(income)			$	(171)					$	(85)					$	27

(a) Excludes amortization of prior service costs/(credits).

We present all non-service cost components of net pension cost/(benefit) and net postretirement cost/(benefit) within other expense/(income) on our consolidated statements of income. See Note 12, 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 5, Acquisitions and Divestitures, for additional information related to our loss/(gain) on sale of business. See Note 13, Financial Instruments, for information related to our derivative impacts.

Other expense/(income) was income of $171 million in 2025 compared to $85 million in 2024. This change was primarily driven by a $212 million net gain on derivative activities in 2025 compared to a $45 million net loss on derivative activities in 2024, a $53 million increase in interest income in 2025 compared to 2024, a $42 million loss on the sale of business in 2025 compared to a $81 million loss on the sale of business in 2024, and $4 million of income in other miscellaneous income in 2025 compared to $19 million of expense in other miscellaneous expense in 2024. These impacts were partially offset by a $234 million net foreign exchange loss in 2025 compared to a $21 million net foreign exchange gain in 2024 and a $28 million decrease in net pension and postretirement non-service benefits in 2025 compared to 2024.

Other expense/(income) was $85 million of income in 2024 compared to $27 million of expense in 2023. This change was primarily driven by a $130 million net pension and postretirement non-service benefit in 2024 compared to a $67 million net pension and postretirement non-service cost in 2023, a $21 million net foreign exchange gain in 2024 compared to a $73 million net foreign exchange loss in 2023, and $69 million in interest income in 2024 compared to $40 million in interest income in 2023. These impacts were partially offset by a $45 million net loss on derivative activities in 2024 compared to a $59 million net gain on derivative activities in 2023, a $81 million net loss on the sale of businesses in 2024 compared to a $4 million net gain on the sale of business in 2023, and a $19 million expense in other miscellaneous expenses in 2024 compared to a $4 million expense in other miscellaneous expenses in 2023.