Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in net carrying value of Goodwill by segment for the years ended December 31, 2022 and 2021 were as follows:


	2021
	Beginning Balance		Acquisitions		Impairments		Foreign currency translation		Ending Balance
Oral, Personal and Home Care
North America	$	912	$	—	$	—	$	—	$	912
Latin America	171		—		—		(12)		159
Europe	2,415		—		(367)		(146)		1,902
Asia Pacific	190		—		—		(8)		182
Africa/Eurasia	121		—		—		(7)		114
Total Oral, Personal and Home Care	3,809		—		(367)		(173)		3,269
Pet Nutrition	15		—		—		—		15
Total Goodwill	$	3,824	$	—	$	(367)	$	(173)	$	3,284


	2022
	Beginning Balance		Acquisitions (1)		Impairments		Foreign currency translation		Ending Balance
Oral, Personal and Home Care
North America	$	912	$	—	$	—	$	(6)	$	906
Latin America	159		—		—		9		168
Europe	1,902		—		(332)		(66)		1,504
Asia Pacific	182		—		—		(3)		179
Africa/Eurasia	114		—		—		(7)		107
Total Oral, Personal and Home Care	3,269		—		(332)		(73)		2,864
Pet Nutrition	15		474		—		(1)		488
Total Goodwill	$	3,284	$	474	$	(332)	$	(74)	$	3,352

(1) For information related to the Company's acquisitions, refer to Note 3, Acquisitions

Other intangible assets as of December 31, 2022 and 2021 were comprised of the following:


	2022						2021
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Trademarks - finite life	$	885	$	(471)	$	414	$	891	$	(445)	$	446
Other finite life intangible assets	616		(322)		294		744		(289)		455
Indefinite life intangible assets	1,212		—		1,212		1,561		—		1,561
Total Other intangible assets	$	2,713	$	(793)	$	1,920	$	3,196	$	(734)	$	2,462

The change in the net carrying amounts of Other intangible assets during 2022 was due to the impact of impairment charges related to the Filorga intangible assets as more fully described below, foreign currency translation and amortization expense of $80. Annual estimated amortization expense for each of the next five years is expected to be approximately $64.

In the fourth quarter of 2022, the Company made revisions to the internal forecasts relating to its Filorga reporting unit due primarily to the continued impact of the COVID-19 pandemic, particularly in China, as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels. The Company concluded that the changes in circumstances in this reporting unit and the impact of significantly higher interest rates triggered the need for an interim impairment review of its indefinite-lived trademark, goodwill, and long-lived assets which consists primarily of customer relationships. As a result of the interim impairment test, the Company concluded that the carrying value of the trademark and customer relationships exceeded their estimated fair value, and recorded impairment charges of $300 and $89, respectively, reducing their carrying values to $257 and $118, respectively, as of December 31, 2022. After adjusting the carrying values of the trademark and customer relationship intangible assets, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $332 in the Filorga reporting unit, reducing the carrying value of goodwill to $214 as of December 31, 2022. The goodwill and intangible assets impairment charges are presented as a separate line item in the Consolidated Statements of Income.

In the fourth quarter of 2021, the Company made revisions to the internal forecasts relating to its Filorga reporting unit due primarily to the impact of the COVID-19 pandemic on the Filorga skin health business as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels. The Company performed an impairment review and concluded that the carrying value of the trademark exceeded its estimated fair value, and recorded an impairment charge of $204, reducing the carrying value to approximately $588. After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $367 in the Filorga reporting unit, reducing the carrying value of goodwill to approximately $577.

The Company used the income approach to determine the fair value of the Filorga reporting unit, indefinite-lived trademark and customer relationships that required significant judgments and estimates by management regarding several key inputs, including future cash flows consistent with management’s plans, sales growth rates, customer attrition rate, and the selection of royalty rate and a discount rate, among others. Estimating sales growth rates requires significant judgment by management in areas such as future economic conditions, category and industry growth rates, product pricing, consumer tastes and preferences and future expansion expectations.