Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill, for the years ended December 31, 2023 and 2022 are as follows:


(in millions of dollars)	Agriculture		Construction		Financial Services		Total
Balance at January 1, 2022	$	3,020	$	49	$	141	$	3,210
Foreign currency translation and other	68		(3)		(1)		64
Acquisitions	48		—		—		48
Balance at December 31, 2022	3,136		46		140		3,322
Foreign currency translation and other	2		1		1		4
Acquisitions	288		—		—		288
Balance at December 31, 2023	$	3,426	$	47	$	141	$	3,614

During 2023, the acquisitions of Augmenta, Bennamann and Hemisphere led to an increase in goodwill for Agriculture of $76 million, $118 million and $111 million, respectively. Goodwill related to the acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. During fiscal year 2023, measurement period adjustments were recorded reducing goodwill by $14 million and $3 million for Augmenta and Bennamann, respectively. The valuations of assets acquired and liabilities assumed have not yet been finalized as of December 31, 2023. Thus, goodwill associated with the acquisitions is subject to adjustment during the measurement period.

Impairment testing for goodwill is done at a reporting unit level. Under the goodwill impairment test, CNH’s estimate of the fair value of the reporting unit is compared with its carrying value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. CNH has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary.

Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if a triggering event occurs. At December 31, 2023, the Company completed its annual impairment assessment and concluded there were no impairments to goodwill for any of the reporting units. As of December 31, 2023 the estimated fair values of all reporting units with goodwill exceeded the carrying value by more than 40%. Accordingly, management determined that none of the reporting units were at higher risk for impairment at December 31, 2023.

As of December 31, 2023, and December 31, 2022, the Company’s other intangible assets and related accumulated amortization consisted of the following:


		2023						2022
(in millions of dollars)	Weighted Avg. Life	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Other intangible assets subject to amortization:
Dealer networks	20-25	$	246	$	223	$	23	$	291	$	242	$	49
Patents, concessions, licenses and other	5-25	928		523		405		787		470		317
Capitalized software	2-5	1,070		810		260		890		683		207
		2,244		1,556		688		1,968		1,395		573
Other intangible assets not subject to amortization:
In-process research and development		213		—		213		165		—		165
Software in-progress		119		—		119		119		—		119
Trademarks		272		—		272		272		—		272
Total other intangible assets		$	2,848	$	1,556	$	1,292	$	2,524	$	1,395	$	1,129

During 2023, the Company’s acquisitions lead to an increase in intangible assets of $35 million, $46 million and $51 million for Augmenta, Bennamann and Hemisphere, respectively. The recorded intangibles comprised for developed technology, in-process R&D, and customer relationships. Measurement period adjustments were recorded in the second and third quarters increasing intangible assets by $12 million and $5 million for Augmenta and Bennamann, respectively. The valuation of assets acquired and liabilities assumed has not been finalized as of December 31, 2023. The intangible assets associated with the acquisitions are subject to adjustment during the measurement period.

CNH recorded amortization expense of $164 million, $130 million and $85 million during 2023, 2022 and 2021, respectively.

Based on the current amount of other intangible assets subject to amortization, the estimated annual amortization expense for each of the succeeding 5 years is expected to be as follows: $162 million in 2024; $113 million in 2025; $87 million in 2026; $73 million in 2027 and $51 million in 2028.