Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Objective:

The following discussion provides an analysis of our financial condition and results of operations from management's perspective and should be read in conjunction with the condensed consolidated financial statements and related notes included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. Our objective is to also provide discussion of material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides an understanding of our financial condition, results of operations, and cash flows.

Description of the Company:

We manufacture and market food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products throughout the world.

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.

See Note 16, Segment Reporting, in Item 1, Financial Statements, for our financial information by segment.

Acquisitions and Divestitures:

In the first quarter of 2024, we closed the sale of the Russia Infant Transaction and the Papua New Guinea Transaction, both within Emerging Markets. See Note 4, Acquisitions and Divestitures, in Item 1, Financial Statements, for additional information on divestiture activities.

Business Trends and Items Affecting Comparability of Financial Results

Inflation, Supply Chain, and Tariff Impacts:

During the three months ended March 29, 2025, we continued to experience inflationary pressures at rates in line with those experienced throughout 2024. We are closely monitoring the recent tariff and trade policy actions changes taken by the United States and foreign governments. As the situation continues to remain fluid due to the rapidly changing global trade environment, we are still evaluating the potential implications of these actions on our business. If enacted as currently outlined, we expect that the proposed trade policy changes would primarily impact a subset of our North America segment (primarily within our Hydration and Coffee platforms). We anticipate an increase in cost of products sold due to certain raw materials currently sourced from outside of the U.S. as well as the impact of tariffs on certain products that are part of our integrated supply chain that spans the U.S. and Canada. During the three months ended March 29, 2025, these tariff actions have not had a significant impact on our results of operations; however, we have experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment.

While the ultimate impact of tariffs remains uncertain and we anticipate taking measures to attempt to mitigate these negative cost impacts, these tariff and trade policy actions may have a material impact on our results of operations. Further, we expect that there could be a difference between the timing of when these mitigation actions impact our results of operations and when the cost inflation is incurred, and that any pricing actions we take could negatively impact our market share.

Results of Operations

We disclose in this report certain non-GAAP financial measures. These non-GAAP financial measures assist management in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our underlying operations. For additional information and reconciliations to the most closely comparable financial measures presented in our condensed consolidated financial statements, which are calculated in accordance with U.S. GAAP see Non-GAAP Financial Measures.

Consolidated Results of Operations

Summary of Results:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions, except per share data)
Net sales			$	5,999					$	6,411					(6.4)		%
Operating income/(loss)			1,196						1,302						(8.1)		%
Net income/(loss)			714						804						(11.2)		%
Net income/(loss) attributable to common shareholders			712						801						(11.1)		%
Diluted EPS			0.59						0.66						(10.6)		%

Net Sales:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions)
Net sales			$	5,999					$	6,411					(6.4)		%
Organic Net Sales(a)			6,083						6,383						(4.7)		%

(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Net sales decreased 6.4% to $6.0 billion for the three months ended March 29, 2025 compared to $6.4 billion for the three months ended March 30, 2024, including the unfavorable impacts of foreign currency (1.6 pp) and acquisitions and divestitures (0.1 pp). Organic Net Sales decreased 4.7% to $6.1 billion for the three months ended March 29, 2025 compared to $6.4 billion for the three months ended March 30, 2024, primarily due to the unfavorable volume/mix (5.6 pp), which more than offset higher pricing (0.9 pp). Higher pricing in North America and Emerging Markets was partially offset by lower pricing in International Developed Markets. Volume/mix was unfavorable across all segments.

Net Income/(Loss):

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions)
Operating income/(loss)			$	1,196					$	1,302					(8.1)		%
Net income/(loss)			714						804						(11.2)		%
Net income/(loss) attributable to common shareholders			712						801						(11.1)		%
Adjusted Operating Income(a)			1,199						1,265						(5.2)		%

(a) Adjusted Operating Income is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Operating income/(loss) decreased 8.1% to income of $1.2 billion for the three months ended March 29, 2025 compared to income of $1.3 billion for the three months ended March 30, 2024, primarily due to unfavorable volume/mix, unfavorable changes in unrealized losses/(gains) on commodity hedges, and increased procurement cost inflation, which more than offset our efficiency initiatives. These unfavorable impacts to operating income/(loss) were partially offset by decreased selling, general and administrative expenses (“SG&A”), primarily due to lower variable compensation expense and decreased advertising expenses, and higher pricing.

Net income/(loss) decreased 11.2% to income of $714 million for the three months ended March 29, 2025 compared to income of $804 million for the three months ended March 30, 2024. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above and higher income tax expense, partially offset by the favorable changes in other expense/(income).

• Our effective tax rate for the three months ended March 29, 2025 was an expense of 29.9% on pre-tax income, compared to an expense of 21.9% on pre-tax income for the three months ended March 30, 2024. The year-over-year increase in the effective tax rate for the three-month period was primarily driven by a less favorable geographic mix of pre-tax income in various non-U.S. jurisdictions primarily due to the changes made to our corporate entity structure in December 2024, and the unfavorable impact of certain discrete deferred tax adjustments.

• Other expense/(income) was $51 million of income for the three months ended March 29, 2025 compared to $47 million of expense for the three months ended March 30, 2024. This change was primarily driven by an $80 million net loss on the sale of business in the first quarter of 2024 and $92 million of favorable changes in derivative losses/(gains), partially offset by $85 million of unfavorable changes in net foreign exchange losses/(gains).

Adjusted Operating Income decreased 5.2% to $1.2 billion for the three months ended March 29, 2025 compared to $1.3 billion for the three months ended March 30, 2024, primarily driven by unfavorable volume/mix, increased procurement cost inflation, which more than offset our efficiency initiatives, and the unfavorable impact of foreign currency (0.8 pp). These unfavorable impacts more than offset decreased SG&A, primarily due to lower variable compensation expense and decreased advertising expenses, and higher pricing.

Diluted EPS:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
Diluted EPS			$	0.59					$	0.66					(10.6)		%
Adjusted EPS(a)			0.62						0.69						(10.1)		%

(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Diluted EPS decreased 10.6% to $0.59 for the three months ended March 29, 2025 compared to $0.66 for the three months ended March 30, 2024, primarily due to the net income/(loss) factors discussed above, which more than offset the favorable impact of our common stock repurchases.

			For the Three Months Ended
			March 29, 2025						March 30, 2024						$ Change						% Change
Diluted EPS			$	0.59					$	0.66					$	(0.07)					(10.6)		%
Restructuring activities			0.01						—						0.01
Unrealized losses/(gains) on commodity hedges			—						(0.02)						0.02
Losses/(gains) on sale of business			—						0.05						(0.05)
Nonmonetary currency devaluation			0.01						—						0.01
Certain significant discrete income tax items			0.01						—						0.01
Adjusted EPS(a)			$	0.62					$	0.69					$	(0.07)					(10.1)		%
Key drivers of change in Adjusted EPS(a):
Results of operations															$	(0.04)
Other expense/(income)															0.01
Effective tax rate															(0.06)
Effect of common stock repurchases(b)															0.02
															$	(0.07)

(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

(b) Includes the impact of the change in the weighted average shares of common stock outstanding, including dilutive effect, which is primarily due to shares purchased pursuant to our publicly announced share repurchase program. See Note 15, Earnings Per Share, for more information on our weighted average shares outstanding.

Adjusted EPS decreased 10.1% to $0.62 for the three months ended March 29, 2025 compared to $0.69 for the three months ended March 30, 2024. This decrease was primarily due to lower Adjusted Operating Income and higher taxes on adjusted earnings, which more than offset the favorable impact of our common stock repurchases and favorable changes in other expense/(income).

Results of Operations by Segment

We manage our operating results through four operating segments. We have two reportable segments defined by geographic region: North America and International Developed Markets. Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

Management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted Operating Income. Segment Adjusted Operating Income is defined as operating income/(loss) excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters. Segment Adjusted Operating Income for Emerging Markets, which represents the aggregation of our WEEM and AEM operating segments, is defined and presented consistently with the Segment Adjusted Operating Income of our reportable segments — North America and International Developed Markets. Segment Adjusted Operating Income is a financial measure that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. Management also uses Segment Adjusted Operating Income to allocate resources.

Under highly inflationary accounting, the financial statements of a subsidiary are remeasured into our reporting currency (U.S. dollars) based on the legally available exchange rate at which we expect to settle the underlying transactions. Exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in other expense/(income) on our condensed consolidated statements of income, as nonmonetary currency devaluation, rather than accumulated other comprehensive income/(losses) on our condensed consolidated balance sheets, until such time as the economy is no longer considered highly inflationary. See Note 2, Significant Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2024, for additional information. We apply highly inflationary accounting to the results of our subsidiaries in Venezuela, Turkey, and Egypt, which are all in Emerging Markets.

Net Sales:

			For the Three Months Ended
			March 29, 2025						March 30, 2024
			(in millions)
Net sales:
North America			$	4,488					$	4,828
International Developed Markets			817						855
Emerging Markets			694						728
Total net sales			$	5,999					$	6,411

Organic Net Sales:

			For the Three Months Ended
			March 29, 2025						March 30, 2024
			(in millions)
Organic Net Sales(a):
North America			$	4,515					$	4,828
International Developed Markets			840						855
Emerging Markets			728						700
Total Organic Net Sales			$	6,083					$	6,383

(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Drivers of the changes in net sales and Organic Net Sales for the three months ended March 29, 2025 compared to the three months ended March 30, 2024 were:

			Net Sales						Currency						Acquisitions and Divestitures						Organic Net Sales						Price						Volume/Mix
For the Three Months Ended
North America			(7.0)		%				(0.5) pp						0.0 pp						(6.5)		%				0.6 pp						(7.1) pp
International Developed Markets			(4.4)		%				(2.7) pp						0.0 pp						(1.7)		%				(0.2) pp						(1.5) pp
Emerging Markets			(4.7)		%				(7.5) pp						(1.1) pp						3.9		%				4.3 pp						(0.4) pp
Kraft Heinz			(6.4)		%				(1.6) pp						(0.1) pp						(4.7)		%				0.9 pp						(5.6) pp

Adjusted Operating Income:

			For the Three Months Ended
			March 29, 2025						March 30, 2024
			(in millions)
Segment Adjusted Operating Income:
North America			$	1,101					$	1,215
International Developed Markets			127						136
Emerging Markets			99						82
General corporate expenses			(128)						(168)
Restructuring activities			(4)						3
Unrealized gains/(losses) on commodity hedges			1						34
Operating income/(loss)			1,196						1,302
Interest expense			229						226
Other expense/(income)			(51)						47
Income/(loss) before income taxes			$	1,018					$	1,029

North America:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions)
Net sales			$	4,488					$	4,828					(7.0)		%
Organic Net Sales(a)			4,515						4,828						(6.5)		%
Segment Adjusted Operating Income			1,101						1,215						(9.4)		%

(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Net sales decreased 7.0% to $4.5 billion for the three months ended March 29, 2025 compared to $4.8 billion for the three months ended March 30, 2024, including the unfavorable impacts of foreign currency (0.5 pp). Organic Net Sales decreased 6.5% to $4.5 billion for the three months ended March 29, 2025 compared to $4.8 billion for the three months ended March 30, 2024, primarily due to unfavorable volume/mix (7.1 pp), which more than offset higher pricing (0.6 pp). Unfavorable volume/mix was primarily driven by declines in cream cheese, Meats, and Desserts due, in part, to the shift in Easter timing, as well as declines in Lunchables and Coffee. Higher pricing was taken in certain categories to mitigate higher input costs, primarily in coffee.

Segment Adjusted Operating Income decreased 9.4% to $1.1 billion for the three months ended March 29, 2025 compared to $1.2 billion for the three months ended March 30, 2024, primarily due to unfavorable volume/mix, increased procurement cost inflation, which more than offset our efficiency initiatives, higher depreciation expense, and the unfavorable impact of foreign currency (0.4 pp). These unfavorable impacts to Segment Adjusted Operating Income more than offset higher pricing and decreased SG&A, primarily due to lower variable compensation expense and decreased advertising expenses.

International Developed Markets:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions)
Net sales			$	817					$	855					(4.4)		%
Organic Net Sales(a)			840						855						(1.7)		%
Segment Adjusted Operating Income			127						136						(7.0)		%

(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Net sales decreased 4.4% to $817 million for the three months ended March 29, 2025 compared to $855 million for the three months ended March 30, 2024, including the unfavorable impacts of foreign currency (2.7 pp). Organic Net Sales decreased 1.7% to $840 million for the three months ended March 29, 2025 compared to $855 million for the three months ended March 30, 2024, primarily due to unfavorable volume/mix (1.5 pp) and lower pricing (0.2 pp). Unfavorable volume/mix was primarily due to industry slowdowns of meals and sauces in the United Kingdom, which more than offset favorable volume/mix in Australia and New Zealand primarily driven by lapping a prior year inventory reduction by a regional customer.

Segment Adjusted Operating Income decreased 7.0% to $127 million for the three months ended March 29, 2025 compared to $136 million for the three months ended March 30, 2024, primarily driven by higher procurement costs, due, in part, to the impact of cocoa inflation in our Netherlands business, lower pricing, and the unfavorable impact of foreign currency (1.2 pp), which more than offset decreased SG&A, primarily for advertising expenses.

Emerging Markets:

			For the Three Months Ended
			March 29, 2025						March 30, 2024						% Change
			(in millions)
Net sales			$	694					$	728					(4.7)		%
Organic Net Sales(a)			728						700						3.9		%
Segment Adjusted Operating Income(b)			99						82						20.3		%

(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

(b) Segment Adjusted Operating Income for Emerging Markets, which represents the combination of our WEEM and AEM operating segments, is defined and presented consistently with the Segment Adjusted Operating Income of our reportable segments - North America and International Developed Markets.

Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Net sales decreased 4.7% to $694 million for the three months ended March 29, 2025 compared to $728 million for the three months ended March 30, 2024, including the unfavorable impacts of foreign currency (7.5 pp) and acquisitions and divestitures (1.1 pp). Organic Net Sales increased 3.9% to $728 million for the three months ended March 29, 2025 compared to $700 million for the three months ended March 30, 2024, primarily driven by higher pricing (4.3 pp), which more than offset unfavorable volume/mix (0.4 pp). Higher pricing was taken primarily in certain countries within WEEM to address inflationary pressures. Unfavorable volume/mix was due, in part, to the shift in Ramadan timing.

Segment Adjusted Operating Income increased 20.3% to $99 million for the three months ended March 29, 2025 compared to $82 million for the three months ended March 30, 2024, primarily due to higher pricing and lower SG&A. These favorable impacts to Segment Adjusted Operating Income more than offset higher supply chain costs reflecting inflationary pressure in WEEM, the unfavorable impact of foreign currency (8.3 pp), unfavorable volume/mix, and higher depreciation expense.

Liquidity and Capital Resources

We believe that cash generated from our operating activities, commercial paper programs, and our senior unsecured revolving credit facility (the “Senior Credit Facility”) will provide sufficient liquidity to meet our working capital needs, repayments of long-term debt, future contractual obligations, payment of our anticipated quarterly dividends, planned capital expenditures, restructuring expenditures, and contributions to our postemployment benefit plans for the next 12 months. An additional potential source of liquidity is access to capital markets. We intend to use our cash on hand and commercial paper programs for daily funding requirements.

Cash Flow Activity for the Three Months Ended March 29, 2025 Compared to the Three Months Ended March 30, 2024:

Net Cash Provided by/Used for Operating Activities:

Net cash provided by operating activities was $720 million for the three months ended March 29, 2025 compared to $771 million for the three months ended March 30, 2024. This decrease was primarily driven by higher cash outflows related to inventories, primarily related to stock rebuilding for the current year due, in part, to the shift in Easter timing, as well as lower Adjusted Operating Income. These impacts were partially offset by lower cash outflows from variable compensation in the 2025 period compared to the 2024 period.

Net Cash Provided by/Used for Investing Activities:

Net cash used for investing activities was $878 million for the three months ended March 29, 2025 compared to $287 million for the three months ended March 30, 2024. This change was primarily driven by the purchase of marketable securities in the 2025 period, partially offset by lower capital expenditures in the 2025 period compared to the 2024 period. We expect 2025 capital expenditures to be approximately $1.0 billion compared to the 2024 capital expenditures of $1.0 billion. Our 2025 capital expenditures are expected to be primarily driven by maintenance projects, investments in technology, capital investments focused on generating growth, including cost improvements, capacity expansion, investments in warehouse, and automation.

Net Cash Provided by/Used for Financing Activities:

Net cash provided by financing activities was $900 million for the three months ended March 29, 2025 compared to net cash used for financing activities of $239 million for the three months ended March 30, 2024. This change was primarily driven by debt proceeds received from the issuance of the 2025 Notes in the current year period and decreased repurchases of common stock compared to the prior year period. See Note 14, Commitments, Contingencies, and Debt for additional information on our debt issuances.

Cash Held by International Subsidiaries:

Of the $2.1 billion cash and cash equivalents on our condensed consolidated balance sheet at March 29, 2025, $694 million was held by international subsidiaries.

Subsequent to January 1, 2018, we consider the unremitted earnings of certain international subsidiaries that impose local country taxes on dividends to be indefinitely reinvested. 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 $90 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 March 29, 2025 and December 28, 2024 and relates to local withholding taxes that would be owed when this cash is distributed.

Trade Payables Programs:

In order to manage our cash flow and related liquidity, we work with our suppliers to optimize our terms and conditions, which

include the extension of payment terms. We maintain agreements with third-party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell one or more of those payment obligations to participating financial institutions. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 250 days. All amounts due to participating suppliers are paid to the third party on the original invoice due dates, regardless of whether a particular invoice was sold. The amounts confirmed outstanding under these programs were $743 million at March 29, 2025 and $745 million at December 28, 2024. The amounts were included in accounts payable on our consolidated balance sheets. See Note 13, Financing Arrangements, in Item 1, Financial Statements, for additional information on our trade payables programs.

Borrowing Arrangements:

From time to time, we obtain funding through our commercial paper programs. We had no commercial paper outstanding at March 29, 2025, at December 28, 2024, or during the three months ended March 29, 2025 or March 30, 2024.

Our Senior Credit Facility provides for a revolving commitment of $4.0 billion through July 8, 2029. Subject to certain conditions, we may increase the amount of revolving commitments and/or add tranches of term loans in a combined aggregate amount of up to $1.0 billion.

No amounts were drawn on our Senior Credit Facility at March 29, 2025 or December 28, 2024, or during the three months ended March 29, 2025 or March 30, 2024.

Our credit agreement contains customary representations, warranties, and covenants that are typical for these types of facilities and could, upon the occurrence of certain events of default, restrict our ability to access our Senior Credit Facility. We were in compliance with all financial covenants as of March 29, 2025.

Long-Term Debt:

Our long-term debt, including the current portion, was $21.6 billion at March 29, 2025 and $19.9 billion at December 28, 2024. This increase was primarily due to the issuance of the 2025 Notes, as well as changes in foreign currency exchange rates on our foreign-denominated debt.

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”). We expect to use the net proceeds from the 2025 Notes for general corporate purposes, including our investment in certain marketable fixed-income debt securities that are classified as available-for-sale and to fund the repayment of outstanding indebtedness such as our 600 million euro senior notes that mature in May 2025 and our $1.9 billion senior notes that mature in June 2026.

We have aggregate principal amounts of senior notes of approximately 600 million euros maturing in May 2025.

We may from time to time seek to retire or purchase our outstanding debt through redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately negotiated transactions, Rule 10b5-1 plans, or otherwise.

Our long-term debt contains customary representations, covenants, and events of default. We were in compliance with all financial covenants as of March 29, 2025.

See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, for additional information on our long-term debt activity, Note 11, Financial Instruments, in Item 1, Financial Statements, for additional information on our available-for-sale securities, and Note 16, Debt, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2024 for additional information on our borrowing arrangements and long-term debt.

Equity and Dividends:

We paid dividends on our common stock of $477 million for the three months ended March 29, 2025. Additionally, in the second quarter of 2025, our Board of Directors declared a cash dividend of $0.40 per share of common stock, which is payable on June 27, 2025 to stockholders of record on May 30, 2025.

The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net income, financial condition, cash requirements, future prospects, and other factors that our Board of Directors deems relevant to its analysis and decision making.

On November 27, 2023, we announced that the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $3.0 billion, exclusive of fees, of the Company’s common stock through December 26, 2026. We are not obligated to repurchase any specific number of shares and the program may be modified, suspended, or discontinued at any time. Under the program, shares may be repurchased in open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), privately negotiated transactions, transactions structured through investment banking institutions, or other means. We purchased 6.6 million shares during the three months ended March 29, 2025 and had approximately $1.7 billion remaining authorization under the share repurchase program as of March 29, 2025. The share repurchase program is in addition to our share repurchases to offset the dilutive effect of equity-based compensation.

Aggregate Contractual Obligations:

In the first quarter of 2025, we issued the 2025 Notes, which mature between 2032 and 2035. See Note 14, Commitments, Contingencies and Debt, in Item 1, Financial Statements, for additional information. There were no other material changes to our aggregate contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 28, 2024.

Supplemental Guarantor Information:

The Kraft Heinz Company (as the “Parent Guarantor”) fully and unconditionally guarantees all the senior unsecured registered notes (collectively, the “KHFC Senior Notes”) issued by KHFC, our 100% owned operating subsidiary (the “Guarantee”). See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, and Note 16, Debt, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2024 for additional descriptions of these guarantees.

The payment of the principal, interest and premium, when applicable, on the KHFC Senior Notes is fully and unconditionally guaranteed on a senior unsecured basis by the Parent Guarantor, pursuant to the terms and conditions of the applicable indenture. None of the Parent Guarantor’s subsidiaries guarantee the KHFC Senior Notes.

The Guarantee is the Parent Guarantor’s senior unsecured obligation and is: (i) pari passu in right of payment with all of the Parent Guarantor’s existing and future senior indebtedness; (ii) senior in right of payment to all of the Parent Guarantor’s future subordinated indebtedness; (iii) effectively subordinated to all of the Parent Guarantor’s existing and future secured indebtedness to the extent of the value of the assets secured by that indebtedness; and (iv) effectively subordinated to all existing and future indebtedness and other liabilities of the Parent Guarantor’s subsidiaries.

The KHFC Senior Notes are obligations exclusively of KHFC and the Parent Guarantor and not of any of the Parent Guarantor’s other subsidiaries. Substantially all of the Parent Guarantor’s operations are conducted through its subsidiaries. The Parent Guarantor’s other subsidiaries are separate legal entities that have no obligation to pay any amounts due under the KHFC Senior Notes or to make any funds available therefor, whether by dividends, loans, or other payments. Except to the extent the Parent Guarantor is a creditor with recognized claims against its subsidiaries, all claims of creditors (including trade creditors) and holders of preferred stock, if any, of its subsidiaries will have priority with respect to the assets of such subsidiaries over its claims (and therefore the claims of its creditors, including holders of the KHFC Senior Notes). Consequently, the KHFC Senior Notes are structurally subordinated to all liabilities of the Parent Guarantor’s subsidiaries and any subsidiaries that it may in the future acquire or establish. The obligations of the Parent Guarantor will terminate and be of no further force or effect in the following circumstances: (i) (a) KHFC’s exercise of its legal defeasance option or, except in the case of a guarantee of any direct or indirect parent of KHFC, covenant defeasance option in accordance with the applicable indenture, or KHFC’s obligations under the applicable indenture have been discharged in accordance with the terms of the applicable indenture or (b) as specified in a supplemental indenture to the applicable indenture; and (ii) the Parent Guarantor has delivered to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the applicable indenture have been complied with. The Guarantee is limited by its terms to an amount not to exceed the maximum amount that can be guaranteed by the Parent Guarantor without rendering the Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

The following tables present summarized financial information for the Parent Guarantor and KHFC (as subsidiary issuer of the KHFC Senior Notes) (together, the “Obligor Group”), on a combined basis after the elimination of all intercompany balances and transactions between the Parent Guarantor and subsidiary issuer and investments in any subsidiary that is a non-guarantor.

Summarized Statement of Income

			For the Three Months Ended
			March 29, 2025
Net sales			$	3,864
Gross profit(a)			1,467
Intercompany service fees and other recharges			1,018
Operating income/(loss)			279
Equity in earnings/(losses) of subsidiaries			728
Net income/(loss)			712
Net income/(loss) attributable to common shareholders			712

(a) For the three months ended March 29, 2025, the Obligor Group recorded $118 million of net sales to the non-guarantor subsidiaries and $15 million of purchases from the non-guarantor subsidiaries.

Summarized Balance Sheets

			March 29, 2025						December 28, 2024
ASSETS
Current assets			$	6,789					$	4,506
Current assets due from affiliates(a)			220						445
Non-current assets			5,823						5,848
Goodwill			8,823						8,823
Intangible assets, net			1,853						1,881
Non-current assets due from affiliates(b)			28						28
LIABILITIES
Current liabilities			$	3,949					$	5,563
Current liabilities due to affiliates(a)			978						1,924
Non-current liabilities			22,919						22,846
Non-current liabilities due to affiliates(b)			199						194

(a) Represents receivables and short-term lending due from and payables and short-term lending due to non-guarantor subsidiaries.

(b) Represents long-term lending due from and long-term borrowings due to non-guarantor subsidiaries.

Commodity Trends

We purchase and use large quantities of commodities, including dairy products, meats, coffee bean, sugar and other sweeteners, tomatoes, edible oils, wheat products, eggs, and fruits and vegetables to manufacture our products. In addition, we purchase and use significant quantities of plastics, cardboard, resins, glass and paper to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products. We continuously monitor global supply and cost trends of these commodities.

During the three months ended March 29, 2025, we experienced stabilized commodity costs for tomato products, sugar and other sweeteners, fruits and vegetables, and wheat products, while coffee, cheese and dairy, meat, and eggs costs increased and commodity costs for edible oils decreased. We manage commodity cost volatility primarily through pricing and risk management strategies including utilizing a range of commodity hedging techniques in an effort to limit the impact of price fluctuations on many of our principal raw materials. However, we do not fully hedge against changes in commodity prices, and our hedging strategies may not protect us from increases in specific raw material costs. As a result of these risk management strategies, our commodity costs may not immediately correlate with market price trends.

See our Annual Report on Form 10-K for the year ended December 28, 2024 for additional information on how we manage commodity costs.

Critical Accounting Estimates

Our significant accounting policies are described in Note 2, Significant Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2024.

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments, and assumptions. Our critical accounting estimates and assumptions related to goodwill and intangible assets are described below. We have included an update to our critical accounting estimates as we performed an interim triggering event impairment test as a result of the Q1 Europe reorganization. The Q1 Europe reorganization did not impact our brands and the information below is limited to our consolidated goodwill balances. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 28, 2024 for a discussion of our other critical accounting estimates and assumptions.

Goodwill and Intangible Assets:

As of March 29, 2025, we maintain 11 reporting units, seven of which comprise our goodwill balance. These seven reporting units had an aggregate goodwill carrying amount of $28.8 billion at March 29, 2025.

We test our reporting units and brands for impairment annually, as of the first day of our third quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections, disposals of significant brands or components of our business, unexpected business disruptions (for example due to a natural disaster, pandemic, or loss of a customer, supplier, or other significant business relationship), unexpected significant declines in operating results, significant adverse changes in the markets in which we operate, changes in income tax rates, changes in interest rates, or changes in management strategy. We test reporting units for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. We test brands for impairment by comparing the estimated fair value of each brand with its carrying amount. If the carrying amount of a reporting unit or brand exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount, in the case of reporting units, not to exceed the associated carrying amount of goodwill. See Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, for a discussion of the timing of the annual impairment test.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units and brands requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax considerations, discount rates, long-term growth rates, royalty rates, contributory asset charges, and other market factors. 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 or brands might become impaired in the future. Additionally, any decisions to divest certain non-strategic assets has led and could in the future lead to goodwill or intangible asset impairments.

Our reporting units that were impaired in 2024 were written down to their respective fair values, resulting in zero excess fair value over carrying amount as of the applicable impairment test dates. Accordingly, these and our other reporting units that had 20% or less excess fair value over carrying amount as of their latest impairment test have a heightened risk of future impairments if any assumptions, estimates, or market factors change in the future.

Reporting units with 10% or less fair value over carrying amount, including reporting units that were impaired as part of their latest impairment test resulting in zero excess fair value over carrying amount, had an aggregate goodwill carrying amount after impairment of $21.9 billion as of the latest impairment test and included TMS, AFH, MC, and CNAC. Our WE reporting unit had 10-20% fair value over carrying amount with an aggregate goodwill carrying amount of $2.2 billion as of the latest impairment test. Our HD and Asia reporting units had 20-50% fair value over carrying amount with an aggregate goodwill carrying amount of $4.6 billion as of the latest impairment test. Our reporting units that have less than 5% excess fair value over carrying amount as of the latest impairment test are considered at a heightened risk of future impairments and include our TMS and AFH reporting units, which had an aggregate goodwill carrying amount of $18.6 billion. Our four remaining reporting units had no goodwill carrying amount at the time of the 2024 annual impairment test.

We generally utilize the discounted cash flow method under the income approach to estimate the fair value of our reporting units. Some of the more significant assumptions inherent in estimating the fair values include the estimated future annual net cash flows for each reporting unit (including net sales, cost of products sold, SG&A, depreciation and amortization, working capital, and capital expenditures), income tax rates, long-term growth rates, royalty rates, a discount rate that appropriately reflects the risks inherent in each future cash flow stream, and other market factors. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management’s plans, and guideline companies.

The discount rates and long-term growth rates used to estimate the fair values of our reporting units with 20% or less excess fair value over carrying amount, as well as the goodwill carrying amounts, as of their latest impairment test were as follows:

			Goodwill Carrying Amount (in billions)						Discount Rate												Long-Term Growth Rate
						Minimum						Maximum						Minimum						Maximum
Reporting units			$	24.1					7.8		%				12.0		%				1.3		%				4.0		%

Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment test date. Additionally, these assumptions are generally interdependent and do not change in isolation. However, as it is reasonably possible that changes in assumptions could occur, as a sensitivity measure, we have presented the estimated effects of isolated changes in discount rates and long-term growth rates on the fair values of our reporting units with 20% or less excess fair value over carrying amount. These estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline.

If we had changed the assumptions used to estimate the fair value of our reporting units with 20% or less excess fair value over carrying amount, as of their latest impairment test date, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of these reporting units (in billions):

			Discount Rate												Long-Term Growth Rate
			50-Basis-Point												25-Basis-Point
			Increase						Decrease						Increase						Decrease
Reporting units			$	(4.0)					$	4.7					$	2.0					$	(1.8)

See Note 7, Goodwill and Intangible Assets, in Item 1, Financial Statements, for our impairment testing results.

New Accounting Pronouncements

See Note 3, New Accounting Standards, in Item 1, Financial Statements, for a discussion of new accounting pronouncements.

Contingencies

See Note 14, Commitments, Contingencies, and Debt, in Item 1, Financial Statements, for a discussion of our contingencies.

Non-GAAP Financial Measures

The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.

To supplement the condensed consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Organic Net Sales, Adjusted Operating Income, and Adjusted EPS, which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable U.S. GAAP financial measures, such as net sales, net income/(loss), operating income(loss), diluted EPS, or other measures prescribed by U.S. GAAP, and there are limitations to using non-GAAP financial measures.

Management uses these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect our underlying operations. We believe that Organic Net Sales, Adjusted Operating Income, and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis.

Management believes that presenting our non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures.

Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. We calculate the impact of currency on net sales by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which we calculate the previous year’s results using the current year’s exchange rate.

Adjusted Operating Income is defined as operating income excluding, when they occur, the impacts restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters.

Adjusted EPS is defined as diluted EPS excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items, and including, when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis.

The Kraft Heinz Company

Reconciliation of Net Sales to Organic Net Sales

(dollars in millions)

(Unaudited)

			Net Sales						Currency						Acquisitions and Divestitures						Organic Net Sales						Price						Volume/Mix
Three Months Ended March 29, 2025
North America			$	4,488					$	(27)					$	—					$	4,515
International Developed Markets			817						(23)						—						840
Emerging Markets			694						(34)						—						728
Kraft Heinz			$	5,999					$	(84)					$	—					$	6,083
Three Months Ended March 30, 2024
North America			$	4,828					$	—					$	—					$	4,828
International Developed Markets			855						—						—						855
Emerging Markets			728						20						8						700
Kraft Heinz			$	6,411					$	20					$	8					$	6,383

Year-over-year growth rates
North America			(7.0)		%				(0.5) pp						0.0 pp						(6.5)		%				0.6 pp						(7.1) pp
International Developed Markets			(4.4)		%				(2.7) pp						0.0 pp						(1.7)		%				(0.2) pp						(1.5) pp
Emerging Markets			(4.7)		%				(7.5) pp						(1.1) pp						3.9		%				4.3 pp						(0.4) pp
Kraft Heinz			(6.4)		%				(1.6) pp						(0.1) pp						(4.7)		%				0.9 pp						(5.6) pp

The Kraft Heinz Company

Reconciliation of Operating Income/(Loss) to Adjusted Operating Income

(dollars in millions)

(Unaudited)

			For the Three Months Ended
			March 29, 2025						March 30, 2024
Operating income/(loss)			$	1,196					$	1,302
Restructuring activities			4						(3)
Unrealized losses/(gains) on commodity hedges			(1)						(34)
Adjusted Operating Income			$	1,199					$	1,265

The Kraft Heinz Company

Reconciliation of Diluted EPS to Adjusted EPS

(Unaudited)

			For the Three Months Ended
			March 29, 2025						March 30, 2024
Diluted EPS			$	0.59					$	0.66
Restructuring activities(a)			0.01						—
Unrealized losses/(gains) on commodity hedges(b)			—						(0.02)
Losses/(gains) on sale of business(c)			—						0.05
Nonmonetary currency devaluation(d)			0.01						—
Certain significant discrete income tax items(e)			0.01						—
Adjusted EPS			$	0.62					$	0.69

(a) Gross expenses/(income) included in restructuring activities was expense of $4 million ($3 million after-tax) for the three months ended March 29, 2025 and income of $3 million ($2 million after-tax) for the three months ended March 30, 2024 and were recorded in the following income statement line items:

• Cost of products sold included income of $2 million for the three months ended March 29, 2025 and expenses of $1 million for the three months ended March 30, 2024; and

• SG&A included expenses of $6 million for the three months ended March 29, 2025 and income of $4 million for the three months ended March 30, 2024.

(b) Gross expenses/(income) included in unrealized losses/(gains) on commodity hedges were income of $1 million ($1 million after-tax) for the three months ended March 29, 2025 and income of $34 million ($26 million after-tax) for the three months ended March 30, 2024, and were recorded in cost of products sold.

(c) Gross expenses/(income) included in losses/(gains) on sale of business were expenses of $80 million ($68 million after-tax) for the three months ended March 30, 2024 and were recorded in other expense/(income).

(d) Gross expenses included in nonmonetary currency devaluation were $14 million ($14 million after-tax) for the three months ended March 29, 2025 and were recorded in other expense/(income).

(e) Certain significant discrete income tax items were an expense of $13 million for the three months ended March 29, 2025. The expense represents current period movement in the valuation allowance against deferred tax assets in our subsidiary in Brazil and adjustments recorded to the deferred tax asset and valuation allowance related to the transfer of business operations to a wholly-owned subsidiary in the Netherlands in December 2024.