Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the gross carrying value of goodwill and accumulated impairment losses are presented in the table below by segment.


	Americas		EMEA&APAC(1)		Consolidated
	(In millions)
Gross carrying value of goodwill	$	6,790.4	$	1,387.6	$	8,178.0
Accumulated impairment losses	(1,498.5)		(1,387.6)		(2,886.1)
Balance as of December 31, 2022	$	5,291.9	$	—	$	5,291.9


Foreign currency translation, net	0.5		—		0.5

Gross carrying value of goodwill	6,792.8		1,415.6		8,208.4
Accumulated impairment losses	(1,500.4)		(1,415.6)		(2,916.0)
Balance as of March 31, 2023	$	5,292.4	$	—	$	5,292.4

(1)The EMEA&APAC goodwill balance was fully impaired during the year ended December 31, 2020. Subsequent changes in the gross carrying value of goodwill and accumulated impairment loss balances are due to fluctuations in foreign exchange rates, which are presented net in the table above.

Subsequent to taking a partial impairment as a result of the annual impairment test performed as of October 1, 2022, the Americas reporting unit goodwill balance was considered at risk of future impairment. The remaining goodwill is at risk in the event of significant unfavorable changes in assumptions including the forecasted cash flows, terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flows analysis. We continue to build on the strength of our iconic core brands, growing our above premium portfolio and expanding beyond the beer aisle. While progress has been made on this strategy, including the increasing proportion of our above premium portfolio over the last several years and the strengthening of our core brands, the growth targets included in management’s forecasted future cash flows are inherently at risk given that the strategies are still in progress. In addition, the growth targets were adjusted to align with current expectations of the beer industry environment and broader macroeconomic conditions such as cost inflation for certain inputs, which could continue to put pressure on achieving key margin and cash flow projections into the future. Additionally, the fair value determinations are sensitive to further macroeconomic conditions, including the ongoing impacts of cost inflation, further increases to interest rates and other external industry factors impacting our business.

We determined that there was no triggering event that occurred during the three months ended March 31, 2023 that would indicate the carrying value of our goodwill was greater than its fair value.

Intangible Assets, Other than Goodwill

The following table presents details of our intangible assets, other than goodwill, as of March 31, 2023:


	Useful life	Gross		Accumulated amortization		Net
	(Years)	(In millions)
Intangible assets subject to amortization
Brands	10 - 50	$	4,885.1	$	(1,471.7)	$	3,413.4
License agreements and distribution rights	10 - 20	202.7		(110.3)		92.4
Other	5 - 40	84.7		(24.1)		60.6
Intangible assets not subject to amortization
Brands	Indefinite	8,176.8		—		8,176.8
Distribution networks	Indefinite	748.5		—		748.5
Other	Indefinite	307.6		—		307.6
Total		$	14,405.4	$	(1,606.1)	$	12,799.3

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2022:


	Useful life	Gross		Accumulated amortization		Net
	(Years)	(In millions)
Intangible assets subject to amortization
Brands	10 - 50	$	4,861.1	$	(1,416.7)	$	3,444.4
License agreements and distribution rights	15 - 20	200.0		(108.0)		92.0
Other	5 - 40	88.8		(27.7)		61.1
Intangible assets not subject to amortization
Brands	Indefinite	8,148.6		—		8,148.6
Distribution networks	Indefinite	746.4		—		746.4
Other	Indefinite	307.6		—		307.6
Total		$	14,352.5	$	(1,552.4)	$	12,800.1

The changes in the gross carrying amounts of intangible assets from December 31, 2022 to March 31, 2023 are primarily driven by the impact of foreign exchange rates, as a significant amount of intangible assets are denominated in foreign currencies.

Based on foreign exchange rates as of March 31, 2023, the estimated future amortization expense of intangible assets is as follows:


Fiscal year	Amount
	(In millions)
2023 - remaining	$	153.7
2024	$	203.6
2025	$	203.6
2026	$	185.1
2027	$	120.6

Amortization expense of intangible assets was $51.1 million and $53.3 million for the three months ended March 31, 2023 and March 31, 2022, respectively. This expense is primarily presented within MG&A expenses in our unaudited condensed consolidated statements of operations.

As of the date of our annual impairment test of indefinite-lived intangible assets, performed as of October 1, 2022, the fair value of all indefinite-lived brands exceeded their respective carrying values by over 15% and therefore were not considered at risk for potential future impairment.

No triggering events occurred during the three months ended March 31, 2023 that would indicate the carrying value of our indefinite-lived or definite-lived intangible assets were greater than their fair value.

Fair Value Assumptions

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The key assumptions used to derive the estimated fair values of our reporting units and indefinite-lived intangible assets are discussed in Part II—Item 8 Financial Statements, Note 6, "Goodwill and Intangible Assets" in our Annual Report, and represent Level 3 measurements.