Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in net carrying value of Goodwill by segment for the years ended December 31, 2023 and 2022 were as follows:


	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


	2023
	Beginning Balance		Acquisitions		Impairments		Foreign currency translation		Ending Balance
Oral, Personal and Home Care
North America	$	906	$	—	$	—	$	2	$	908
Latin America	168		—		—		11		179
Europe	1,504		—		—		67		1,571
Asia Pacific	179		—		—		—		179
Africa/Eurasia	107		—		—		(19)		88
Total Oral, Personal and Home Care	2,864		—		—		61		2,925
Pet Nutrition	488		—		—		(3)		485
Total Goodwill	$	3,352	$	—	$	—	$	58	$	3,410

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

Other intangible assets as of December 31, 2023 and 2022 were comprised of the following:


	2023						2022
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Trademarks - finite life	$	1,167	$	(519)	$	648	$	885	$	(471)	$	414
Other finite life intangible assets	624		(363)		261		616		(322)		294
Indefinite life intangible assets	978		—		978		1,212		—		1,212
Total Other intangible assets	$	2,769	$	(882)	$	1,887	$	2,713	$	(793)	$	1,920

The change in the net carrying amounts of Other intangible assets during 2023 was due to foreign currency translation and amortization expense of $72. Annual estimated amortization expense for each of the next five years is expected to be approximately $72. In 2023, the Company re-characterized a certain trademark from an indefinite to a finite life intangible asset based on an assessment of certain macroeconomic conditions, historical performance and demand. The carrying value of this trademark as of December 31, 2023 is $260 and is being amortized over its estimated remaining useful life of 25 years.

As of the date of the annual goodwill impairment test, the fair value of the Filorga reporting unit in the Europe segment approximates its carrying value. The carrying value of goodwill associated with this reporting unit is $221 as of December 31, 2023. The estimated fair value of the Company’s remaining reporting units substantially exceeds their carrying value.

As of the date of the annual impairment test of indefinite-lived intangible assets, the fair value of one of the Company’s indefinite-lived trademark intangible assets approximates its carrying value. The carrying value of this trademark is $312 as of December 31, 2023.

Given the inherent uncertainties of estimating the future impacts of interest rates and inflation on macroeconomic conditions, actual results may differ from management's current estimates which could potentially result in additional impairment charges in future periods.

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.

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 a 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.